city & land developers, incorporated definitive

C O V E R S H E E T

SEC Registration Number 1 5 2 6 6 1

C O M P A N Y N A M E

C I T Y & L A N D D E V E L O P E R S ,

I N C O R P O R A T E D

PRINCIPAL OFFICE ( No. / Street / Barangay / City / Town / Province )

3 / F C i t y l a n d C o n d o m i n i u m 1 0 ,

T o w e r I , 1 5 6 H . V . D e l a C o s t a

S t r e e t , M a k a t i C i t y

Form Type Department requiring the report Secondary License Type, If Applicable

2 0 - I S M S R D N / A (Definitive Information Statement)

C O M P A N Y I N F O R M A T I O N

Company’s Email Address Company’s Telephone Number Mobile Number

[email protected] 8-893-6060 0968-545-1452 No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)

751 (as of March 31, 2021)

2nd Tuesday of June December 31

CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation

Name of Contact Person Email Address Telephone Number/s Mobile Number

Rudy Go [email protected] 8-893-6060 0968-545-1452

CONTACT PERSON’S ADDRESS

3/F Cityland Condominium 10 Tower II, 154 H. V. Dela Costa Street, Makati City NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated. 2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records with the Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies.

.

NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

NOTICE IS HEREBY GIVEN that the Annual Stockholders’ Meeting (ASM) of CITY & LAND DEVELOPERS, INCORPORATED (the Company) will be held virtually or via remote communication on June 8, 2021, Tuesday at 4:00PM.

The following shall be the agenda of the meeting:

A G E N D A

1. Call to Order 2. Proof of Notice of Meeting 3. Determination of Quorum and Rules of Conduct and Procedures 4. Approval of Minutes of previous Annual Stockholders’ Meeting 5. President’s Report 6. Election of Directors (including Independent Directors) 7. Appointment of External Auditor 8. Confirmation of all acts of the Board of Directors for the period covering January 1, 2020 to

December 31, 2020 adopted in the ordinary course of business, including but not limited to: a. Approval of investments; b. Treasury matters related to opening of accounts and bank transactions; c. Appointment of signatories and amendments thereof; and d. Approval of Annual Report and related Financial Statements

9. Approval of the Board Resolution dated April 26, 2021 regarding the following: a. Declaration of Five Percent (5%) stock dividend; b. Increase in authorized capital stock from 1,435,000,000 shares to 1,715,000,000 shares with par

value of Php1.00 per share; and c. To cause the amendment of the Articles of Incorporation to increase the authorized capital stock to

1,715,000,000 shares with par value of Php1.00 per share. 10. Other matters which may be raised by the body 11. Adjournment

For the purpose of the meeting, only stockholders of record as of May 10, 2021 are entitled to attend and vote in the said meeting.

In light of the COVID-19 pandemic, stockholders who intend to attend and participate in the ASM shall submit the scanned copy of the Letter of Intent via email to [email protected] and participate via proxy by remote communication. Once validated, a registered stockholder will receive the proxy form via email.

Validation of proxies shall be until 4:00 pm of June 1, 2021. Registered stockholders will receive the meeting link and password two days before the ASM.

Only stockholders who have notified the Company of their intention to participate in the virtual meeting and have registered themselves or their proxies, will be included in the determination of a quorum.

We are not soliciting your proxy.

The requirements and procedure for voting and participation in the meeting through remote communication will be discussed further in the Information Statement which shall be made available to the public not later than May 18, 2021 through PSE Edge and the Company’s website.

For ASM related queries, kindly send an email to [email protected] or contact the Office of the Corporate Secretary at 8893-6060 local 224/236.

For account updating concerns, please contact the Company’s Stock Transfer Agent, Professional Stock Transfer, Inc. (Attention: Ms. Jenny Serafica), through 8687-2733 or via email [email protected].

We encourage all registered stockholders to log onto the meeting link 45 minutes before the meeting starts, to avoid any technical difficulty. The meeting will start promptly at 4:00 in the afternoon.

The meeting shall be recorded in audio and video format and copies shall be kept by the Company.

Copies of the minutes of the Annual Stockholders’ Meeting held last August 25, 2020 will be available upon request.

Makati City, April 26, 2021

FOR THE BOARD OF DIRECTORS

ATTY. ANDRE ANTON S. SUAREZ Corporate Secretary

DELL

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EXPLANATION OF AGENDA ITEMS REQUIRING STOCKHOLDERS’ APPROVAL

In accordance with Article VII – Stockholders’ Meeting of the Company’s Amended By-Laws, the annual meeting of the stockholders shall be held every second Tuesday of June of each calendar year, when the Board of Directors shall be elected by plurality of votes by ballot system or viva voce.

Item 1: Call to Order

The Chairman of the Board of Directors will formally call the meeting to order.

Item 2: Proof of Notice of Meeting

Rationale: To inform the stockholders that the notices of meeting were sent to all stockholders in accordance with the Revised Corporation Code of the Philippines and Company’s Amended By-laws.

The Corporate Secretary (or Secretary) will certify the date when notices for the 2021 ASM were sent out to the stockholders of record, including the date of publication and the newspapers where the notice was published.

Item 3: Determination of Quorum and Voting Procedures

Rationale: To determine the presence of a quorum for the 2021 Annual Stockholders’ Meeting and to inform the stockholders of the voting procedures for the agenda items to be discussed in the ASM.

The Secretary will inform the body and attest the existence of a quorum in the meeting. As stated in the Company’s Amended By-Laws, the stockholders’ meeting shall be competent to decide any matter or transact any business, provided a majority of the subscribed capital stock is present or represented thereat, except in those cases wherein the Corporation Laws requires the affirmative vote of a greater proportion. The number of shares represented in the meeting is validated by a third-party stock transfer agent.

Voting Procedures

Each common share shall be entitled to one vote with respect to all matters to be taken up during the annual stockholders’ meeting. In accordance with the Company’s Amended By-Laws, voting upon all questions at all meetings of the stockholders shall be by shares of stock and not per capita.

At least a majority of the outstanding capital stock of the Company is required for the election of directors and approval of the following matters:

a. Minutes of the previous Annual Stockholders’ Meeting b. Appointment of external auditor c. Acts of the management and of the Board of Directors relative to Annual Report and related financial

statements.

The Company’s Stock Transfer Agent together with the Office of the Corporate Secretary will tabulate all valid and confirmed votes. The Company also has an independent party that will validate the votes counted by the Secretary.

The voting procedures are discussed in the Information Statement.

Item 4: Approval of Minutes of Previous Annual Stockholders’ Meeting (ASM)

Rationale: To obtain from the stockholders the approval of the minutes of the ASM held last August 25, 2020.

The Chairman will request the Secretary to read the minutes of the said meeting. The minutes of ASM held last August 25, 2020 are posted on the Company website (http://cityland.net/). The minutes of the previous ASM are hereby presented to the stockholders for approval.

Item 5: President’s Report

Rationale: To inform the stockholders of the Company’s financial position and performance.

The Secretary will read the President’s Report on the Company’s financial position and performance as of and for the year ended December 31, 2020 including any future projects of the Company. The detailed discussion of the financial position and results of operations are presented in the Information Statement. The audited financial statements are duly submitted to the Securities and Exchange Commission, Philippine Stock Exchange and the Bureau of Internal Revenue.

Representatives of Sycip Gorres Velayo & Co., the Company’s external auditor for the Year 2020, are invited in the ASM to respond to queries concerning the audited financial statements.

Item 6: Election of Directors (including Independent Directors)

Rationale: To give the stockholders the opportunity to elect the Company’s Board of Directors in accordance with Section 23 of the Revised Corporation Code and the Company’s Amended By-Laws.

In accordance with the Company’s Amended By-Laws, the general management of the Corporation, shall be vested in a Board of nine (9) directors, at least two (2) of whom shall be independent directors, who are stockholders and who shall be elected annually by the stockholders owning or representing the majority of the subscribed capital stock of the term of one (1) year and shall serve until the election and qualification of their successors.

A nomination of independent directors shall be conducted by the Nomination Committee prior to the stockholders’ meeting. All recommendations shall be signed by the nominating stockholders together with the acceptance and conformity by the would-be nominees. The Committee shall pre-screen the qualifications and prepare a final list of all candidates and put in place screening policies and parameters to enable it to effectively review the qualifications of the nominees for independent directors.

The names of the individuals who have been duly nominated as members of the Board of Directors of the Company, including independent directors, shall be presented during the ASM. The qualifications and profiles of the nominees are discussed in the Preliminary Information Statement. The stockholders who nominated the independent directors and other members of the Board are also disclosed in the Preliminary Information Statement.

Item 7: Appointment of External Auditor

Rationale: To appoint external auditor who will provide an opinion as to the fairness of the financial statements of the Company and assess the adequacy of the internal controls implemented by the Company.

The Audit and Risk Committee will recommend to the Board of the Directors the appointment of external auditor who will provide an opinion on the fairness of the financial statements of the Company and assess the adequacy of internal controls implemented by the Company. The Audit and Risk Committee, in its meeting held on April 5, 2021, recommended to the Board of Directors the re-appointment of Sycip Gorres Velayo & Co. as the Company’s external auditors for the calendar year 2021.

The re-appointment of Sycip Gorres Velayo & Co. was approved by the Board of Directors and shall be presented to the stockholders for approval.

Item 8: Confirmation of all acts of the Board of Directors for the period covering January 1, 2020 to December 31, 2020 adopted in the ordinary course of business

Rationale: To obtain from the stockholders confirmation of all the acts of the Board of Directors for the period covering January 1, 2020 to December 31, 2020.

Confirmation of all the acts of the Board of Directors will be requested from the stockholders. All significant transactions required to be submitted to the Securities and Exchange Commission through SEC Form 17-C and to the Philippine Stock Exchange can be accessed on the Company’s website (http://cityland.net/).

Item 9: Approval of the Board Resolution dated April 26, 2021

Rationale: In accordance with the Revised Corporation Code, the following matters shall be presented to the stockholders for approval of at least two-thirds (2/3) of the outstanding capital stock:

The Board of Directors, in its meeting held today, April 26, 2021, approved the following:

a. Declaration of Five Percent (5%) stock dividend which shall come from the unappropriated retained earnings as of December 31, 2020 through an increase in authorized capital stock;

b. Increase in authorized capital stock from 1,435,000,000 shares to 1,715,000,000 shares with par value of Php1.00 per share. The application for the increase in authorized capital stock shall be submitted for approval by the Securities and Exchange Commission (SEC). The record date of the stock dividend shall be fixed by SEC after clearance and approval.

c. To cause the amendment of the Articles of Incorporation to increase the authorized capital stock to 1,715,000,000 shares with par value of Php1.00 per share.

The ratification of the said matters will be taken up during the Annual Stockholders’ Meeting and to be held on June 8, 2021.

Item 10: Other Matters which may be raised before the body

Rationale: To give the stockholders the opportunity to ask questions and raise concerns.

Due to the COVID-19 pandemic, other matters which any stockholder would like to present in the ASM shall be sent via email to [email protected] on or before June 1, 2021 at 4:00PM. The Company’s responses to the questions shall be discussed during the ASM.

PROXY

The undersigned stockholder of CITY & LAND DEVELOPERS, INCORPORATED (the Company) hereby appoints or in his absence, the Chairman of the meeting, as his/her/its attorney-in-fact or proxy, with power of substitution, to represent and vote all shares registered in his/her/its name as proxy of the undersigned stockholder, at the Annual Stockholders’ Meeting of the Company to be held on June 8, 2021 at 4:00 PM and at any of the adjournments thereof for the purpose of acting on the following matters:

1. Approval of Minutes of Previous Annual Stockholders’ Meeting held on August 25, 2020

Yes No Abstain

2. Approval of President’s Report

Yes No Abstain

3. Election of Directors (including Independent Directors) Vote for all nominees listed below: Dr. Andrew I. Liuson Stephen C. Roxas Grace C. Liuson Josef C. Gohoc Peter S. Dee (Independent Director)

Withhold authority to vote for all nominees listed above

Withhold authority to vote for the nominees listed below:

4. Appointment of Sycip, Gorres, Velayo & Co. as External Auditor Yes No Abstain

5. Ratification and approval of all acts of the Board of Directors for the period covering January 1, 2020 to December 31, 2020 adopted in the ordinary course of business

Yes No Abstain

6. Approval of the declaration of Five Percent (5%) stock dividend Yes No Abstain

7. Approval of the increase in authorized capital stock from 1,435,000,000 shares to 1,715,000,000 shares with par value of Php1.00 per share

Yes No Abstain 8. Approval of the amendment of the Articles of Incorporation to increase the authorized capital stock from

1,435,000,000 shares to 1,715,000,000 shares with par value of Php1.00 per share Yes No Abstain

9. At their discretion, the proxies named above are authorized to vote upon such other matters as may properly come before the meeting.

Date Printed Name of Stockholder

Signature of Stockholder/ Authorized Signatory

Proxy solicitation is made by or on behalf of the Company. This proxy should be received for validation by stock transfer agent, Professional Stock Transfer, Inc. thru [email protected] on or before June 1, 2021, the deadline for submission of proxies. The said proxies will also be validated by the Corporate Secretary.

This proxy, when properly executed, will be voted in the manner as directed herein by the stockholder(s). If no direction is made, this proxy will be voted “for” the election of all nominees and for the approval of the matters stated above and for such other matters as may properly come before the meeting in the manner described in the information statement and/or as recommended by management or the board of directors.

A proxy submitted by a corporation should be accompanied by a Corporate Secretary’s Certificate quoting the board resolution designating a corporate officer to execute the proxy. Proxies executed by brokers must be accompanied by a certification under oath stating that the broker has obtained the written consent of the account holder.

Cesar E. Virata (Independent Director) Helen C. RoxasBenjamin I. LiusonEmma A. Choa

IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of April 2021.

ATTY. A REANTO Affiant

i,: 1.11 O2' 11

CITY & LAND DEVELOPERS, INC.

CERTIFICATION

I, Atty. Andre Anton S. Suarez, Corporate Secretary of City & Land Developers, Incorporated with SEC Registration No. of 152661 with principal office address at 3F Cityland Condominium 10 Tower 1, 156 H.V. Dela Costa Street, Makati City, on oath state:

1) That on behalf of City & Land Developers Incorporated, I have caused this Notice of Annual Stockholders' Meeting for the Year 2021;

2) That I read and understood its contents which are true and correct of my own personal knowledge and/or based on true records;

3) That City & Land Developers Incorporated will comply with the requirements set forth in SEC Notice dated June 24, 2020 for a complete and official submission of reports and/or documents through electronic mail; and

4) That I am fully aware that documents filed online which requires pre-evaluation and/or processing fee shall be considered complete and officially received only upon payment of a filing fee.

SUBSCRIBED AND SWORN to before me this at ffiant exhibiting me his Social Security Number 34-4251351-8 and other evidence of identification.

Doc. No. Page No. _crt Book No. \JII) Series of 2021

ATTY.E 'i ..)ULARBAL NOTARY P BLIC FOR MAKATI CITY

UNTIl. JUNE 30, 20 Per SC En Banc R$uPoi datea LIQ 121120

APPt' NTMENT NO, M !BP ROLL NO. 33152

IP NO. 0654.7/Life11-irne/PPLM PTR No: 3S3 fl,'.Mak

15o H.v! Cj

3/F CITYLAND CONDOMINIUM 10 TOWER!, 156 H.V. DELA COSTA STREET, MAKATI CITY 1226 P.O. BOX 5000 MAKATI 1290 TEL.#: 893-60-60 FAX#: 892-86-56 www.cityIand.net

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SECURITIES AND EXCHANGE COMMISSION

SEC FORM 20-IS

INFORMATION STATEMENT PURSUANT TO SECTION 17.1(b) OF THE SECURITIES REGULATION CODE

1. Check the appropriate box:

[ ] Preliminary Information Statement [ x ] Definitive Information Statement

2. Name of Registrant as specified in its charter City & Land Developers, Incorporated 3. Makati City, Philippines

Province, country or other jurisdiction of incorporation or organization 4. SEC Identification Number 152661

5. BIR Tax Identification Code 000-444-840 6. 3/F Cityland Condominium 10 Tower I, 156 H.V. Dela Costa Street,

Makati City 1226 Address of principal office Postal Code

7. Registrant's telephone number, including area code (632) 8-893-6060 8. Date, time and place of the meeting of security holders

Date - June 8, 2021 Time - 4:00 PM Place - Virtually or via remote communication

In light of the COVID-19 global pandemic, there will be no physical venue alloted for stockholders to attend the Annual Stockholders' Meeting (ASM). Thus, the ASM will be held virtually or via remote communication. The presiding officer shall call and preside the ASM at Makati City, where the principal office of the Corporation is located.

9. Approximate date on which the Information Statement is to be first sent or given to security holders

May 18, 2021.

10. Securities registered pursuant to Sections 8 and 12 of the Code or Sections 4 and 8 of the RSA (information on number of shares and amount of debt is applicable only to corporate registrants):

Title of Each Class Number of Shares Outstanding Unclassified Common Shares 1,431,785,284

11. Are any or all of registrant's securities listed on a Stock Exchange?

Yes [ X ] No [ ] If yes, disclose the name of such Stock Exchange and the class of securities listed therein:

Stock Exchange Title of Each Class Philippine Stock Exchange Unclassified Common Shares

Therese R. Aquino

2

INFORMATION REQUIRED IN INFORMATION STATEMENT

A. GENERAL INFORMATION

I. Date, time and place of meeting of security holders Date - June 8, 2021 Time - 4:00 P.M. Place - Virtually or via remote communication Principal - 3/F Cityland Condominium 10 Tower I, 156 H.V. Dela Office Costa Street, Makati City, Philippines

In light of the COVID-19 global pandemic, there will be no physical venue alloted for stockholders to attend the Annual Stockholders' Meeting (ASM). Thus, the ASM will be held virtually or via remote communication. The presiding officer shall call and preside the ASM at Makati City, where

Approximate date on which the Information Statement is to be first sent or given to security holders May 18, 2021.

II. Dissenters’ Right of Appraisal

Under the Revised Corporation Code, a dissenting stockholder who has voted against a proposed corporate action, shall have the right of appraisal or the right to demand payment of the fair value of his shares only in the following instances:

1. Any amendment to the Articles of Incorporation which has the effect of changing or restricting

the rights of any stockholder or class of shares, or of authorizing preferences in any respect superior to those of the outstanding shares of any class, or of extending or shortening the term of corporate existence;

2. Sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of

the corporate properties and assets; 3. Merger or consolidation; and

4. Investment in another corporation, business or for any purpose other than the primary purpose

for which the corporation was organized.

Statutory procedures to be followed by the dissenting security holders in order to perfect such rights: 1. The appraisal right may be exercised by any stockholder who shall have voted against the

proposed corporate action, by making a written demand on the corporation within thirty (30) days after the date on which the vote was taken for payment of the fair values of his shares; Provided, that failure to make the demand within such period shall be deemed a waiver of the appraisal right. If the proposed corporate action is implemented or affected, the corporation shall pay to such stockholder, upon surrender of the certificate(s) of stock representing his shares, the fair value thereof as of the day prior to the date on which the vote was taken, excluding any appreciation or depreciation in anticipation of such corporate action.

2. If within a period of sixty (60) days from the date the corporate action was approved by the

stockholders, the withdrawing stockholder and the corporation cannot agree on the fair value of the shares, it shall be determined and appraised by three (3) disinterested persons, one of whom shall be named by the stockholder, another by the corporation, and the third by the two thus chosen. The findings of the majority of the appraisers shall be final, and their award shall be paid by the corporation within thirty (30) days after the award is made; provided, further, that upon payment by the corporation of the agreed or awarded price, the stockholder shall forth with transfer his shares to the corporation.

There is no matter to be acted upon at the Annual Stockholders’ Meeting of the Registrant which would fall under any of the foregoing instances of appraisal.

the principal office of the Corporation is located.

Therese R. Aquino

3

III. Interest of Certain Persons in or Opposition to Matters to be Acted Upon

a. No person who has been a director or officer of the Registrant, nor a nominee for election as a director of the Registrant, nor any of their associates have a substantial interest in any matter to be acted upon at the Annual Stockholders’ Meeting, other than the election of directors for the fiscal year 2021.

b. No director has informed the Registrant in writing that he intends to oppose any action to be

taken at the Annual Stockholders’ Meeting.

B. CONTROL AND COMPENSATION INFORMATION

IV. Voting Securities and Principal Holders Thereof

a. The Registrant has 1,431,785,284 unclassified common shares issued and outstanding as of March 31, 2021. Each common share shall be entitled to one vote with respect to all matters to be taken up during the Annual Stockholders’ Meeting.

b. The record date for determining stockholders entitled to notice and to vote during the Annual

Stockholders’ Meeting and also to this information statement is on May 10, 2021. c. In the election of directors, the number of votes to which each stockholder is entitled shall be

equal to the number of shares he owns multiplied by the number of directors to be elected. All stockholders shall have cumulative voting rights. Each stockholder may vote such number of shares for as many persons as there are directors to be elected or he may cumulate said shares and give one candidate as many votes as the number of directors to be elected multiplied by the number of his shares shall equal, or he may distribute them on the same principle among as many candidates as he shall see fit.

d. Security Ownership of Record and Beneficial Owners owning more than 5% of the outstanding

capital stock of the Registrant as of March 31, 2021:

Title of Class Name, Address of Record

Owner & Relationship with Issuer

Beneficial Owner & Relationship with

Record Owner Citizenship

No. of Shares Held

Percentage

Unclassified common shares

Cityland Development Corporation 2/F Cityland Condominium 10 Tower I, 156 H.V. Dela Costa Street, Makati City -principal stockholder

- same as record owner - Filipino 712,030,839 49.73%


Cityland, Inc. 3/F Cityland Condominium 10 Tower I, 156 H.V. Dela Costa Street, Makati City -principal stockholder

- same as record owner - Filipino 422,918,496 29.54%

The Board of Directors directs the voting or disposition of shares held by Cityland Development Corporation:

Name Position Dr. Andrew I. Liuson Director / Chairman of the Board Mr. Stephen C. Roxas Director / Chairman of the Executive Committee Mrs. Grace C. Liuson Director / Vice Chairman of the Board Mr. Josef C. Gohoc Director / President Mr. Peter S. Dee Independent Director / Chairman-Audit & Risk

Committee Mr. George Edwin Y. Sycip Independent Director / Chairman-Corporate

Governance Committee Mrs. Helen C. Roxas Director Mr. Benjamin I. Liuson Director Mr. Eduardo C. Villanueva Independent Director

4

The following directors direct the voting or disposition of the shares held by Cityland, Inc.:

Name Position Mr. Stephen C. Roxas Director / Chairman of the Board Dr. Andrew I. Liuson Director / Vice Chairman of the Board Mrs. Grace C. Liuson Director / Deputy Vice Chairman of the Board Mr. Josef C. Gohoc Director / President Mr. Peter S. Dee Independent Director / Chairman-Audit Risk

Committee / Chairman-Corporate Governance Committee

Ms. Anastasia Y. Dy Independent Director Mr. Benjamin I. Liuson Director Mrs. Helen C. Roxas Director

e. Security Ownership of Management as of March 31, 2021:

Title of Class

Name Position

Citizenship

Amount

Percentage

Nature of Ownership

Directors: Unclassified common shares

Andrew I. Liuson Director / Chairman of the Board

Filipino 18,105,979 1.26% Direct / Indirect


Stephen C. Roxas Director / Chairman of Executive Committee



Grace C. Liuson Director / Vice Chairman of the Board

Filipino 6,737,109 0.47% Direct


Josef C. Gohoc Director / President



Peter S. Dee Independent Director / Chairman- Audit and Risk Committee



Cesar E.A. Virata Independent Director / Chairman- Corporate Governance Committee

Filipino 98,540 0.00% Direct


Helen C. Roxas Director



Benjamin I. Liuson Director



Emma A. Choa Director / Executive Vice President / Treasurer

Filipino 445,231 0.03% Direct / Indirect

Executive Officers: Unclassified common shares

Andrew I. Liuson Director / Chairman of the Board

Filipino – – –


Stephen C. Roxas Director / Chairman of Executive Committee



Grace C. Liuson Director / Vice Chairman of the Board



Josef C. Gohoc Director / President



Emma A. Choa Director / Executive Vice President / Treasurer



Rudy Go Senior Vice President/ Chief

Financial Officer/ Compliance Officer & Corporate Information Officer/ Data Protection Officer/ Investor Relations Officer


5

Title of Class

Name Position

Citizenship

Amount

Percentage

Nature of Ownership


Melita M. Revuelta Vice President/ Alternate

Compliance Officer & Alternate Corporate Information Officer



Atty. Emma G. Jularbal* Vice President – Legal Affairs/ Corporate Secretary



Melita L. Tan Vice President



Romeo E. Ng Vice President



Rosario D. Perez Vice President – Executive Affairs



Winefreda R. Go Vice President – Purchasing Department



Dorothy U. So Assistant Vice President – Head of Internal Audit Department



Jocelyn C. De Asis Assistant Corporate Secretary


Security Ownership of All Directors and Officers 49,697,627 3.45%

*Retired effective April 5, 2021. Atty. Andre Anton S. Suarez was appointed as the Corporate Secretary effective April 5, 2021.

f. The Registrant has no knowledge of any person holding more than 5% of common shares under

voting trust or similar agreement.

g. No change in the control of the corporation has occurred since the beginning of its last fiscal year.

h. Percentage of ownership as of March 31, 2021:

Nationality

Number of shares

Percentage of ownership

Local-owned shares (Filipino) 1,425,772,678 99.58 Foreign-owned shares (Non-Filipino) 6,012,606 0.42 Total 1,431,785,284 100.00

V. Directors and Executive Officers

a. Identify Directors, including Independent Directors, and Executive Officers

The following are the Directors and Executive Officers of the Company for the year 2020:

Names Citizenship Position Period of Service Term of Office

Age Family Relationship

Stephen C. Roxas Filipino Director Chairman of the Executive

Committee

06/28/1988 to Present 07/01/1997 to Present

1 79 Husband of Helen C. Roxas, brother of Grace C. Liuson; brother-in-law of Dr. Andrew I. Liuson; and uncle of Josef C. Gohoc

Dr. Andrew I. Liuson Filipino Director Vice Chairman of the Board Acting Chairman of the

Board Chairman of the Board

06/28/1988 to Present 01/16/2008 to 01/14/2020 01/15/2020 to 08/25/2020 08/26/2020 to Present

1

76 Husband of Grace C. Liuson; brother-in-law of Stephen C. Roxas

6



Grace C. Liuson Filipino Director

Deputy Vice Chairman of the Board

Vice Chairman of the Board

06/28/1988 to Present 02/01/2011 to 08/25/2020

08/26/2020 to Present

1

75 Wife of Andrew I. Liuson; sister of Stephen C. Roxas; aunt of Josef C. Gohoc; and sister-in-law of Helen C. Roxas

Josef C. Gohoc Filipino Director

President 01/04/2011 to Present 02/01/2011 to Present

1 51 Nephew of Stephen C. Roxas, Helen C. Roxas, Grace C. Liuson and Dr. Andrew I. Liuson

Peter S. Dee Filipino Independent Director / Chairman-Audit & Risk Committee

11/22/2004 to Present 1

79 --

Cesar E.A. Virata Filipino Independent Director Chairman-Corporate

Governance Committee


1

90 --

Helen C. Roxas Filipino Director 06/28/1988 to Present 1

71 Wife of Stephen

C. Roxas; sister-in-law of Grace C. Liuson and Dr. Andrew I. Liuson

Benjamin I. Liuson Filipino Director 06/11/2019 to Present 1 71 Brother of Dr. Liuson; and brother-in-law of Grace C. Liuson

Emma A. Choa Filipino Director Executive Vice President Treasurer

08/25/2020 to Present 01/01/2015 to Present 02/01/2011 to Present

1

60 --

Rudy Go Filipino Senior Vice President/ Chief Financial Officer/ Compliance Officer & Corporate Information Officer

Data Protection Officer Investor Relations Officer

01/01/2015 to Present


1

61 --

Melita M. Revuelta Filipino Vice President / Alternate Compliance Officer & Alternate Corporate Information Officer

01/16/2008 to Present/ 01/01/2015 to Present

1

62 --

Melita L. Tan Filipino Vice President 02/21/2004 to Present 1

60 -- Romeo E. Ng Filipino Vice President 01/10/2005 to Present 1

59 --

Rosario D. Perez Filipino Vice President – Executive Affairs

02/09/2017 to Present 1 61 --

Winefreda R. Go Filipino Vice President – Purchasing Department

05/16/2017 to Present 1 62 --

Atty. Emma G. Jularbal

Filipino Vice President – Legal Affairs/ Corporate Secretary

07/01/2001 to 04/04/2021 01/01/2013 to 04/04/2021

1 65 --

Dorothy U. So Filipino Assistant Vice President– Head of Internal Audit Department

07/2001 to Present 1 62 --

7



Jocelyn C. De Asis Filipino Assistant Corporate Secretary

07/03/2013 to Present 1 51 --

Business Experience for the past 5 Years:

Name Name of Office Positions STEPHEN C. ROXAS Cityland Development Corporation

Cityland, Inc. Cityplans, Incorporated MGC New Life Christian Academy Center for Community Transformation

Director / Chairman of Executive Committee

Director / Chairman of the Board Director /President Chairman Board Member

DR. ANDREW I. LIUSON

Cityland Development Corporation Cityland, Inc. Cityplans, Incorporated Febias College of Bible International Graduate School of Leadership Philippine Council of Evangelical Churches Makati Gospel Church

Director / Chairman of the Board Director / Vice Chairman of the

Board Director/ Chairman of the Board Chairman Chairman Chairman President / Trustee

GRACE C. LIUSON

Cityland Development Corporation Cityland, Inc. Cityplans, Incorporated Youth Gospel Center of the Philippines Makati Gospel Church

Director / Vice Chairman of the Board

Director / Deputy Vice Chairman of the Board

Director / Executive Vice President / Treasurer

Treasurer / Trustee Treasurer / Trustee

JOSEF C. GOHOC Cityland Development Corporation Cityland, Inc. Asian Business Solutions, Inc. Philippine Trading & Investment Corporation Atlas Agricultural & Mercantile Development

Corp. Febias College of Bible International Graduate School of Leadership

Director / President Director / President Director Director Director Board of Trustee Board of Trustee

PETER S. DEE Alpolac, Inc Director China Banking Corp Director CBC Properties & Computer Center, Inc Director / President Cityland, Inc. Independent Director / Chairman-

Audit & Risk Committee / Chairman- Corporate Governance Committee

Cityland Development Corporation Independent Director / Chairman- Audit & Risk Committee

Cityplans, Incorporated Independent Director / Chairman- Compensation Committee / Chairman- Audit Committee / Member- Nomination and Election Committee

Commonwealth Foods, Inc. GDSK Development Corporation

Director Director

Hydee Management & Resources Corporation

Director

Kemwerke, Inc Director Makati Curbs Holdings Corporation Director Great Expectation Holdings, Inc Director / Chairman / President The Big D Holdings Corporation Director / Chairman / President

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Name Name of Office Positions

CESAR E.A. VIRATA ATAR IV Property Holding Company, Inc Rizal Commercial Banking Corp. Malayan Insurance Co., Inc. RCBC Realty Corporation Luisita Industrial Park Business World Publishing Corp. Belle Corporation Malayan Education System, Inc. Cavitex Holdings, Inc. YGC Corporate Services, Inc. ALTO Pacific Company, Inc. RCBC Land, Inc. RCBC Bankard Services Corp. AY Foundation, Inc Yuchengco Center Niyog Property Holdings, Inc. Lopez Holdings Corporation World Trade Center Management, Inc. Tan Yan Kee Foundation, Inc. IFI Support Foundation, Inc. UP Business Research Foundation, Inc. Yuchengco Museum DLSU – Dasmarinas Cultural Heritage UCM Foundation, Inc. Cajel Realty Corporation

Chairman & Director Director & Corporate Vice

Chairman Director Director Director Vice Chairman / Independent Director Independent Director Trustee Chairman & Director Director Chairman & Director President & Director Chairman & Director Trustee Trustee Director Independent Director Director Trustee Trustee Trustee Trustee Trustee Chairman Director

HELEN C. ROXAS

Cityland Development Corporation Cityland, Inc. Cityplans, Incorporated Good Tidings Foundation, Inc. MGC New Life Christian Academy

Director Director Director Treasurer Board Member

BENJAMIN I. LIUSON Cityland Development Corporation Director Cityland, Inc. Director The Generics Pharmacy, Inc. Vice Chairman TGP Pharma Inc. Vice Chairman CL Realty Development Inc. President Romans 828 Land Inc. President Silverwind Allov Castings Inc. Director Drugmakers Lab Inc. Director Febias College of Bible Trustee Center for Community Transformation Inc. Trustee Gospel Operation Phil Inc. Trustee Bless Foundation Inc. Trustee Global Filipino Movement, Inc. Trustee Makati Gospel Church Trustee Jedidiah Inc. President Keziah Inc.

President

EMMA A. CHOA Cityland Development Corporation Cityland, Inc. Worldnet Information and Services, Inc.

Director (resigned effective March 10, 2021)

Executive Vice President / Treasurer

Executive Vice President / Treasurer

Treasurer

RUDY GO Cityland Development Corporation

Senior Vice President / Chief Financial Officer / Compliance

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Name Name of Office Positions Officer / Corporate Information Officer / Data Protection Officer / Investor Relations Officer

Cityland, Inc.

Senior Vice President / Chief Financial Officer / Compliance Officer / Corporate Information Officer & Data Protection Officer

Cityplans, Incorporated

Senior Vice President / Compliance Officer / Data Protection Officer

MELITA M. REVUELTA Cityland Development Corporation

Cityland, Inc. Cityplans, Incorporated Worldnet Information & Services Inc.

Vice President / Alternate Compliance Officer & Alternate Corporate Information Officer

Vice President & Asst. Corporate Secretary / Alternate Compliance Officer & Alternate Corporate Information Officer

Vice President /Alternate Compliance Officer

President

MELITA L. TAN Cityland Development Corporation Cityland, Inc.

Vice President Vice President

ROMEO E. NG Cityland Development Corporation Cityland, Inc.

Vice President Vice President

ROSARIO D. PEREZ Cityland Development Corporation Cityland, Inc. Worldnet Information and Services, Inc.

Vice President – Executive Affairs Vice President – Executive Affairs Auditor

WINEFREDA R. GO Cityland Development Corporation Cityland, Inc.

Vice President

Vice President

EMMA G. JULARBAL Cityland Development Corporation Cityland, Inc. Worldnet Information and Services, Inc. Servicore, Inc. Cityland Foundation, Inc. Cityland for Social Progress Foundation, Inc. Christian Executive, Inc.

Vice President – Legal Affairs / Corporate Secretary (retired effective April 5, 2021)

Vice President – Legal Affairs / Corporate Secretary (retired effective April 5, 2021)

Director / Vice President Director Trustee / Chairman Trustee / President Trustee / Corporate Secretary

DOROTHY U. SO Cityland Development Corporation Assistant Vice President- Head of Internal Audit Department

Cityland, Inc. Assistant Vice President- Head of Internal Audit Department

JOCELYN C. DE ASIS Cityplans, Incorporated

Cityland Development Corporation Cityland, Inc.

Corporate Secretary Assistant Corporate Secretary (effective April 5, 2021) Corporate Secretary (effective April 5, 2021)

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b. Identify Significant Employees All employees perform their share in achieving the Registrant’s set goals; hence, there is no identifiable significant employee.

c. Involvement in Certain Legal Proceedings of Any of the Directors and Executive Officers,

During the past five years:

During the past five years up to present, there is no bankruptcy petition filed by or against any business of which such person was a general partner or executive officer of the Company either at a time of the bankruptcy or within two years prior to that time. During the past five years up to present, the Registrant, any of its directors or executive officers has no conviction by final judgment, domestic or foreign, or is not subject to a pending criminal proceeding, domestic or foreign.

During the past five years up to present, the Registrant, any of its directors or executive officers is not subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, commodities or banking activities. During the past five years up to present, the Registrant, any of its directors or executive officers has not been found by a domestic or foreign court of competent jurisdiction (in civil action), the Commission or comparable foreign body, or a domestic or foreign exchange or other organized trading market or self- regulatory organization, to have violated a securities or commodities law or regulation and the judgment has not been reversed, suspended, or vacated.

d. Attendance of Board of Directors

For the year 2020, there were 17 Board of Directors’ meetings. Below is the summary attendance of the members of the Board of Directors:

No. of Meetings Attended / Held Regular Special Total Dr. Andrew I. Liuson 2 / 2 15/15 17/17 Mr. Stephen C. Roxas 2 / 2 15/15 17/17 Mrs. Grace C. Liuson 2 / 2 15/15 17/17 Mr. Josef C. Gohoc 2 / 2 15/15 17/17 Mr. Peter S. Dee 2 / 2 15/15 17/17 Mr. Cesar E.A. Virata 2 / 2 15/15 17/17 Mrs. Helen C. Roxas 2 / 2 15/15 17/17 Mr. Benjamin I. Liuson 2 / 2 15/15 17/17 Emma A. Choa (elected August 25, 2020) 1 / 2 4/15 5/17

e. Legal Proceedings to Which the Registrant or Any of Its Subsidiaries is a Party

The material legal proceedings to which the Company is a party or of which any of its subject during the past five (5) years up to latest date are as follows: • COMPANY

1. Sta. Ana Village Homeowners’ Assoc. Inc. (SAVHA) vs. City & Land Developers, Inc.

Civil Case No. 12-009 Parañaque Regional Trial Court – Branch 274 Date Instituted: January 16, 2012 SAVHA filed a Complaint dated January 16, 2012 which was received by CLDI on March 3, 2012, to enjoin defendant and all persons allowed by said defendant CLDI from using Benedictine Street in Sta. Ana Village, Barangay Sun Valley, Paranaque City, and to order the defendant by way of a writ of mandatory injunction, to open another outlet to the main road without cost or liability to plaintiff. CLDI stated in its Answer that plaintiff has not proven its claim over Benedictine Street

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because the Deed of Donation used by the plaintiff is a falsified and/or spurious document. Furthermore, there is a Right-of-Way Agreement for Benedictine Street. Case was dismissed. However, SAVHA filed a Motion for Reconsideration which was granted. SAVHA's unnotarized Judicial Affidavit of first witness was expunged from the records of the case. SAVHA's legal counsel withdrew from the case. New counsel for SAVHA appeared. First witness of SAVHA was cross-examined by CLDI counsel – witness got confused as to identity of respondent since it appears that complainant sued the wrong corporation. SAVHA counsel moved for 15 days to amend the complaint. CLDI counsel was also granted 15 days to comment on the motion to be filed. Then matter is submitted for resolution of the Court. No dates were set for hearing.

2. Republic of the Philippines represented by the Department of Public Works and

Highways (DPWH), through the Bureau of Design – Right of Way Office (BOD-ROWO) versus City & Land Developers, Inc. Civil Case CA G.R. No. CV-112245 Court of Appeals Date Instituted: July 16, 2013 DPWH filed a Complaint for Expropriation for certain portions of the properties, including the improvements therein, of CLDI located in Barangay Tambo, Paranaque City, which will be part of the NAIA Expressway Project Phase II. CLDI disputed the valuation made by the DPWH on the properties. The Court issued a Decision in favour of CLDI. The DPWH thru the Office Solicitor General (OSG) filed its Motion for Reconsideration which was granted by the new presiding Judge. CLDI filed a Notice of Appeal which was favorably granted by the Court of Appeals. The OSG filed its Motion for Consideration, then CLDI filed its Comment/Objection thereto. An amended Decision was issued by the Court of Appeals as to the interest to be paid by the DPWH. We are now awaiting for the finality of the Amended Decision if the OSG will not elevate its appeal to the Supreme Court.

• PROPERTY

Aside from the mentioned cases, there were no other cases filed wherein any of the Company's property/ies is/are the subject.

There are no cases involving unpaid real estate taxes which are material in amount.

f. Nomination Committee and Nominees for Election as Members of the Board of Directors,

including the Independent Directors The following have been nominated to the Board of Directors for the ensuing term / year:

Andrew I. Liuson Cesar E. Virata (Independent Director) Stephen C. Roxas Helen C. Roxas Grace C. Liuson Benjamin I. Liuson Josef C. Gohoc Emma A. Choa

Peter S. Dee (Independent Director)

An independent director is a person other than an officer or employee of the corporation, its parent or subsidiaries, or any other individual having a relationship with the corporation, which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The independent directors possess all qualifications to serve as an independent director of the Company, as provided for in Section 38 of Securities Regulation Code (SRC) and its implementing rules. The final list of nominees for independent directors as nominated by respective stockholders of the Company and endorsed by Nomination Committee are the following:

Independent Directors Nominating Stockholder Cesar E.A. Virata Romeo E. Ng Peter S. Dee Marianne M. Martin

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The Corporate Governance Committee performs the role of the Nomination Committee. The following members are the members of the Corporate Governance Committee: Mr. Cesar E.A. Virata (Chairman) Mr. Stephen C. Roxas Dr. Andrew I. Liuson Based on SEC MC No. 19 s. 2016 – Code of Corporate Governance for Publicly-Listed Companies dated November 22, 2016, the Securities and Exchange Commission has recommended that an independent director should serve for a maximum cumulative term of nine years only. However, in certain cases that the Company wants to retain an independent director who has served for nine years, the Board should provide meritorious justifications and seek approval of the stockholders during the Annual Stockholders’ Meeting. Mr. Peter Dee and Mr. Cesar Virata have served as Independent Directors of the Company since 2009. Their in-depth knowledge, wisdom and expertise in various industries helped the Company plan and attain its strategic objectives. Further, their irrefutable competencies and experience provide invaluable contribution to the Company. Mr. Dee has a wide experience in banking industry as he served as President and Chief Executive Officer for almost 30 years in one of the largest banks in the Philippines. He is also a Director of the said bank and other publicly-listed companies in the country. His exposure and mastery to risk and financial management delivers insight and significant help to the Company. Mr. Virata served as Finance Minister from 1970 to 1986 and Prime Minister of the Philippines from 1981 to 1986. He also headed the National Economic and Development Authority (NEDA) of the Philippines while serving as Prime Minister. He is also an incumbent Independent Director of other publicly-listed companies and the Vice Chairman of one of the largest banks in the Philippines. He will continuously provide significant benefit and key decision-making strategies to the Company given his wide experience and competence in handling both local and national economic activities. The Board deems it untimely, given the situation brought by the COVID-19 pandemic, to consider other qualified individuals to replace Mr. Dee and Mr. Virata whose valuable insights and advice helped the Company develop its key business thrusts and risk mitigation strategies. Their highly respected credentials and great contributions to the Company justify the Board’s decision to retain Mr. Dee and Mr. Virata as nominees for re-election this coming 2021 Annual Stockholders’ Meeting.

g. Procedures for Nomination and Election of Independent Directors

1. Nomination of independent directors shall be conducted by the Corporate Governance

Committee prior to a stockholders’ meeting. All recommendations shall be signed by the nominating stockholders together with the acceptance and conformity by the would-be nominees. The Committee shall pre-screen the qualifications and prepare a final list of all candidates and put in place screening policies and parameters to enable it to effectively review the qualifications of the nominees for independent director/s. After the nomination, the Committee shall prepare a Final List of Candidates which shall contain all the information about all the nominees for independent directors, as required under Part IV (A) and (C) of “Annex C” of SRC Rule 12, which list, shall be made available to the Commission and to all stockholders through the filing and distribution of the Information Statement, in accordance with SRC Rule 20, or in such other reports the company is required to submit to the Commission. The name of the person or group of persons who recommended the nomination of the independent directors shall be identified in such report including any relationship with the nominee. Only nominees whose names appear on the Final List of Candidates shall be eligible for election as independent directors. No other nominations shall be entertained after the Final

Therese R. Aquino

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List of Candidates shall have been prepared. No further nominations shall be entertained or allowed on the floor during the actual annual stockholders’ meeting.

2. Subject to pertinent existing laws, rules and regulations, the conduct of the election of the independent director shall be made in accordance with the standard election procedures of this By-laws. It shall be the responsibility of the Chairman of the meeting to inform all stockholders in attendance of the mandatory requirement of electing independent directors. He shall ensure that independent directors are elected during the stockholders’ meeting. Specific slot for the independent directors shall not be filled-up by unqualified nominee.

h. Related Party Transactions

The Company, in its regular conduct of business, has entered into transaction with associates and related parties, which principally consist of sharing of expenses. This transaction to and from related parties are made on an arm’s length basis and at current market prices at the time of the transaction.

There were no transactions with promoters in the past five years.

The Company or its related parties have no relationship on parties that fall outside the definition of related parties that enables to negotiate terms of material transactions that may not be available from others or independent parties on an arm’s length basis. Moreover, the Company has no transactions with former senior management or persons that would result in negotiations of terms that are more or less favorable than those available on an arm’s length basis from clearly independent parties that are material to the Company’s financial position or financial performance.

Please refer to Note 21, Related Party Transactions of the Notes to the 2020 Audited Financial Statements attached to the SEC Form 17A or the Annual Report.

i. Members of the Audit and Risk Committee Mr. Peter S. Dee (Chairman) Mrs. Grace C. Liuson Dr. Andrew I. Liuson

j. Parent of the Registrant CDC owns 49.73% of the outstanding capital stock of the Registrant. The ultimate parent is Cityland, Inc. (CI), which owns 29.54% of the outstanding capital stock of the Registrant.

VI. Compensation of Directors and Executive Officers

Executive Compensation Summary Tables

NAME POSITION 2021 (estimate) Josef C. Gohoc President X Winefreda R. Go VP – Purchasing

Department X

Marlon V. Olpindo AVP- Design & Development Department

X

Alrolnik M. Fernando AVP - Admin. Department X Jocelyn F. Kwong Senior Manager X

Salaries P=5,096,196 Bonus 1,299,549 Others 155,600

Total (Top 5) P=6,551,345 Salaries P=6,995,490 Bonus 1,809,222 Others 288,000

Total Other Officers & Directors as a group unnamed P=9,092,712 Grand Total P=15,664,057

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NAME POSITION 2020 (actual) Josef C. Gohoc President X Winefreda R. Go VP - Purchasing Department X Marlon V. Olpindo AVP- Design & Development

Department X

Alrolnik M. Fernando AVP - Admin. Department X Jocelyn F. Kwong Senior Manager X

Salaries P=4,858,531 Bonus 866,366 Others 1,755,907

Total (Top 5) P=7,480,804 Salaries P=6,161,572 Bonus 1,206,148 Others 1,876,597


NAME POSITION 2019 (actual) Josef C. Gohoc President X Winefreda R. Go VP - Purchasing Department X Marlon V. Olpindo AVP- Design & Development

Department X

Alrolnik M. Fernando Senior Manager X Ireneo F. Javalera Senior Manager X

Salaries P=4,507,197 Bonus 1,143,782 Others 3,448,876

Total (Top 5) P=9,099,855 Salaries P=7,148,524 Bonus 1,881,045 Others 2,357,794


The Company has no standard arrangements with regard to remuneration of its directors. In 2020, 2019 and 2018, the BOD received a total of P=5.33 million, P=8.41 million and P=5.40 million, respectively. Moreover, the Company has no standard arrangement with regard to the remuneration of its existing officers aside from the compensation received or any other arrangements in the employment contracts and compensatory plan. The Company does not have any arrangements for stock warrants or options offered to its employees.

VII. Independent Public Accountants

a. SyCip Gorres Velayo & Co. (SGV & Co.) is the Company's external auditor for the calendar year 2020. The same accounting firm is being recommended for re-appointment at the scheduled Annual Stockholders’ Meeting.

b. Representatives of SGV & Co. are expected to be present at the annual stockholders’ meeting

and will respond to questions from the stockholders relating to the audited financial statements. c. Pursuant to SRC Rule 68 paragraph (3)(b)(ix) (Rotation of External Auditors), Ms. Aileen L.

Saringan, partner of SGV & Co., was assigned as signing partner for the Registrant’s financial statements starting the calendar year 2017.

C. ISSUANCE AND EXCHANGE OF SECURITIES VIII. Authorization or Issuance of Securities Other than for Exchange

At least two-thirds (2/3) of the outstanding capital stock is required for the following: a. Declaration of 5% stock dividend; b. Increase in authorized capital stock from 1,435,000,000 shares to 1,715,000,000 shares with

par value of Php1.00 per share; and

Therese R. Aquino

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c. Amendment of the Articles of Incorporation to increase the authorized capital stock to 1,715,000,000 shares with par value of Php1.00 per share.

The number of unclassified common shares that will be issued as a result of the stock dividend based on the issued and outstanding shares of 1,431,785,284 as of March 31, 2021 is approximately 71,589,265 shares with par value of Php1.00 per share.

OTHER MATTERS IX. Action with Respect to Reports

The Minutes of the Annual Stockholders’ Meeting held last August 25, 2020 will be read and submitted to the stockholders for their approval. Said Minutes state that the following matters were approved by the stockholders during the 2020 stockholders’ meeting:

Agenda Items: Approving Dissenting Abstaining Approval of Minutes of Previous Meeting

1,196,811,318 votes -- --

Approval of President's Report 1,196,811,318 votes -- -- Election of Directors (including Independent Directors):

a. Mr. Stephen C. Roxas b. Dr. Andrew I, Liuson c. Mrs. Grace C. Liuson d. Mr. Josef C. Gohoc e. Mr. Cesar E.A. Virata f. Mr. Peter S. Dee g. Mr. Benjamin I. Liuson h. Mrs. Helen C. Roxas i. Ms. Emma A. Choa

1,196,811,318 votes or 83.59% of the

outstanding capital stock

-- --

Appointment of External Auditor: SyCip Gorres Velayo & Co. (SGV & Co. )

1,196,811,318 votes or 83.59% of the


-- --

Confirmation of all acts of the Board of Directors for the period covering January 1, 2019 to December 31, 2019 adopted in the ordinary course of business.

1,196,811,318 votes or 83.59% of the


-- --

The minutes of ASM also contain the following items:

• A description of the voting and vote tabulation procedures used in the said meeting; • A list of directors and officers who attended the meeting; and • Other matters raised by the body during the meeting.

The copies of the minutes of ASM can be accessed through the Company website at www.cityland.net.

X. Other Proposed Actions

1. Confirmation of all acts of the Board of Directors for the period covering January 1, 2020 to December 31, 2020 adopted in the ordinary course of business: a. Approval of investments; b. Treasury matters related to opening of accounts and bank transactions; c. Appointment of signatories and amendments thereof; and d. Approval of Annual Report and related financial statements.

2. Approval of the Board Resolution dated April 26, 2021 regarding the following:

a. Declaration of five percent (5%) stock dividend; b. Increase in authorized capital stock from 1,435,000,000 shares to 1,715,000,000 shares

with par value of Php 1.00 per share; and c. To cause the amendment of the Articles of Incorporation to increase the authorized capital

stock to 1,715,000,000 shares with par value of Php 1.00 per share.

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3. Appointment of external auditor The Audit and Risk Committee, in its meeting held on April 5, 2021, recommended to the Board of Directors the re-appointment of Sycip Gorres Velayo & Co. as the Company’s external auditor for the calendar year 2021.

XI. Voting Procedures

1. Vote Required for Approval or Election

At least majority of the outstanding capital stock of the Registrant is required for the election of directors and for the approval of the following matters:

a. Minutes of the previous Annual Stockholders’ Meeting b. Appointment of external auditor c. Acts of the management and of the Board of Directors relative to the Annual Report and

related financial statements. At least two-thirds (2/3) of the outstanding capital stock is required for the following: a. Declaration of 5% stock dividend; b. Increase in authorized capital stock from 1,435,000,000 shares to 1,715,000,000 shares with

par value of Php 1.00 per share; and c. Amendment of the Articles of Incorporation to increase the authorized capital stock to

1,715,000,000 shares with par value of Php 1.00 per share.

2. Each common share shall be entitled to one vote with respect to all matters to be taken up during the annual stockholders’ meeting. In accordance with the Company’s Amended By-Laws, voting upon all questions at all meetings of the stockholders shall be by shares of stock and not per capita.

3. In light of the COVID-19 global pandemic, the Board of Directors has decided to conduct a virtual ASM via Zoom or its equivalent. As a result, there will be no physical venue allotted for stockholders to attend the meeting.

Stockholders who intend to attend and participate in the virtual meeting through proxy shall first submit via email to [email protected] the scanned copy of the letter of intent to attend and participate via proxy by remote communication. Once validated, the registered stockholder will receive via email the proxy form. Validation of proxies shall be until 4:00 pm of June 1, 2021. Registered stockholders will receive the meeting link and password two days before the ASM. Only stockholders who have notified the Company of their intention to participate in the virtual meeting and have registered themselves or their proxies, will be included in the determination of a quorum.

4. The Company’s Stock Transfer Agent together with the Office of the Corporate Secretary will

tabulate all valid and confirmed votes. The Company also has an independent party that will validate the votes counted by the Secretary.

5. Other matters which any stockholder would like to present in the ASM shall be sent via email to [email protected] on or before June 1, 2021 at 4:00PM. The Company’s responses to the questions shall be discussed during the ASM.

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May 17, 2021.

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CITY & LAND DEVELOPERS, INCORPORATED THE PRESIDENT’S REPORT

The COVID-19 pandemic has disrupted the economic growth of the Philippines for the Year 2020. According to one of the economic reports of National Economic and Development Authority (NEDA), the Gross Domestic Product (GDP) declined drastically due to the quarantine restrictions implemented during the second quarter of 2020 which resulted for the GDP to contract by 16.9%. However, the economy gradually recovered as the Government eases the restrictions on the third quarter which led to a decline in the GDP by 11.4% or an increase of 5.5% from the previous period. With the several economic restrictions and disruptions over the past quarters, the overall GDP for the year 2020 fell by 9.5%. Due to several community quarantines implemented in 2020, consumers shifted to e-commerce activities giving rise to the e-commerce and logistic sectors. As it is timely necessary for the community to have the services of these sectors, the demand for warehouses will also likely to be in a healthy demand in the market which will give real estate sector the opportunity to increase its income through leasing or sale of its real estate properties. Aside from e-commerce and logistics, the Business Process Outsourcing (BPO) sector remained strong during the pandemic which is also expected to grow resulting to an increase in the demand of BPO office spaces. Residential condominiums, on the other hand, faced difficulties during the year as the demand of such decreased. For the year 2021, it is projected that there will be a strong recovery in the economy should there be a relaxation in the quarantine measures as a result of decline in the number of COVID-19 cases. With this, it will allow several business sectors to resume their operations and recover gradually. Further, with the mass vaccination efforts within the country, it is highly probable that business activities will increase causing the Philippine economy to bounce back. Although the scale and duration of the impact of the pandemic remain uncertain as at the report date, the Cityland Group of Companies is optimistic that the real estate sector will eventually show a healthy position in the market in the succeeding periods. GENERAL NATURE OF BUSINESS

A. Background Information

1. Brief Company History

City & Land Developers, Incorporated (the Company or CLDI) is a domestic public corporation registered with the Securities and Exchange Commission on June 28, 1988 and started its commercial operations on August 1, 1992. The Company is 49.73% and 29.54% owned by Cityland Development Corporation (CDC) and Cityland Inc., respectively, while the remaining 20.73% is owned by 749 various stockholders as of March 31, 2021. CLDI is a member of Cityland Group of Companies, a trusted name in real estate industry with proven track record of developing prestigious condominiums in cities of Pasig, Manila and Quezon City; and affordable house and lots in Parañaque City. The Group has been in property development business for more than thirty (30) years.

On December 13, 1999, the issued and outstanding capital stock of the Company was listed in the Philippine Stock Exchange after the initial public offering on November 29, 1999.

2. Nature of Operations

The Company’s primary purpose is to establish an effective institutional medium for acquiring and developing suitable land sites for residential, office, commercial, institutional and industrial uses primarily, but not exclusively, in accordance with the subdivision, condominium, and cooperative concepts of land-utilization and land-ownership.

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Financial Performance

The Company completed last March 2018 the North Residences which is a 29-storey residential and commercial condominium located at EDSA corner Lanutan, Barangay Veterans Village, Quezon City (beside Waltermart). On October 20, 2016, the Company launched One Taft Residences, a 40-storey mixed residential, office and commercial condominium located at 1939 Taft Avenue, Malate, Manila. This project is currently under construction and expected to be completed by September 2022. It is also currently selling the remaining units of Pacific Regency with percentage sold of 99.89% as of December 31, 2020.

Internal sources of liquidity come from sales of condominium units and real estate properties, collection of installment contracts receivables and contract assets, maturing short-term investments while external sources come from commercial papers. Starting 2019, the Company opted not to renew its registration of short-term commercial papers with SEC. All outstanding notes payable were settled on or before November 6, 2019.

FINANCIAL HIGHLIGHTS

In Millions of Pesos 2020 2019 2018

Revenues 354.47 629.43 508.81 Total Assets 2,504.13 2,447.17 2,494.40 Net Worth 2,228.39 2,162.68 2,048.12 Net Income 104.55 175.71 149.70

0 250 500 750 1000 1250 1500 1750 2000 2250 2500

Net income

Net Worth

Total Assets

Revenues

202020192018

1. Project Description

Future Project:

One Hidalgo

One Hidalgo is a 39-storey mixed residential, office and commercial condominium to be located at 1730 P. Hidalgo Lim St., corner Gen. Malvar St., Malate, Manila. It is near various universities (De La Salle University, University of the Philippines - Manila, Philippine Christian University), government agencies (Supreme Court, Court of Appeals, Department of Justice) and other leisure establishments.

Ongoing Project: One Taft Residences One Taft Residences is a 40-storey mixed residential, office and commercial condominium which is located at 1939 Taft Avenue, Malate, Manila. It is with easy access to various universities (De La sale University, University of the Philippines – Manila, Philippine Christian University), transportation hubs, shopping centers, businesses, commercial and government offices. Estimated Date of Completion: September 2022.

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Completed Projects: North Residences The 29-storey commercial and residential condominium is located at EDSA (beside WalterMart) corner Lanutan, Brgy. Veterans Village, Quezon City. It is conceptualized for the practical modern families to enjoy suburban city living that is friendly on the budget. This project was completed in March 2018.

Manila Residences Bocobo

Manila Residences Bocobo, a 34-storey commercial, office and residential condominium located along Jorge Bocobo St., Ermita, Manila City. Its amenities and facilities include swimming pool, children’s play area, gym, multi-purpose deck, function room and 24-hour association security. It is proximate to schools, malls, banks, hospitals, restaurants, churches, government offices and other leisure establishments. Grand Emerald Tower

Grand Emerald Tower, a 39-storey commercial, office and residential condominium located along Emerald Avenue corner Ruby and Garnet Streets, Ortigas Center, Pasig City. Its amenities and facilities include swimming pool, gymnasium, viewing deck, sauna, children’s playground, multi-purpose function room and 24-hour association security. It is proximate to schools, hospitals, shopping malls, banks, restaurants, hotels, churches and other leisure and business establishments. Pacific Regency

Pacific Regency is a 38-storey commercial, office, and residential condominium located at Pablo Ocampo Sr. Ave. (formerly Vito Cruz Street) in front of Rizal Memorial Sports Complex in Manila. Amenities and facilities include swimming pool, gymnasium, separate sauna for male and female, function room, children’s playground, 24-hour association security, viewing area and jogging areas at the roof deck.

2. Major Risks Involved in Each of the Businesses of the Company

The risks to which the Company is exposed include the internal risks such as refinancing risk, credit risk, interest rate risk, market risk and liquidity risk; business risks and operational risks; and external ones arising from the political and economic situation, real estate industry outlook, market competition and asset price bubble.

INTERNAL FACTORS

Refinancing The Company is primarily engaged in real estate development. Risk factor

includes minimal risk debt level of the Company’s borrowings. The short-term nature of these borrowings increases the possibility of refinancing risks. This debt mix in favor of short-term borrowings is a strategy which the Company adopted to take advantage of lower cost of money for short-term loans versus long-term loans. Because the Company has the flexibility to convert its short-term loans to a long-term position by drawing down its credit lines with several banks or sell its receivables, refinancing risk is greatly reduced.

T The Company manages such refinancing risks by having a current and acid-test ratio of 6.98:1 and 1.40:1 as of December 31, 2020 from 6.82:1 and 1.61:1 as of December 31, 2019, respectively.

Credit Risk This is defined as the risk that one party to a financial instrument will cause a

financial loss for the other party by failing to discharge an obligation. The financial instruments which may be the subject of credit risk are the installment contracts receivables, contract assets and other financial assets of the Company. The corresponding management strategies for the aforementioned risks are as follows: a. The credit risk on the installment contracts receivables and contract assets

may arise from the buyers who may default on the payment of their amortizations. The Company manages this risk by dealing only with recognized and credit worthy third parties. Moreover, it is the Company’s

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policy to subject customers who buy on financing to credit verification procedures. Also, receivable balances are monitored on an on-going basis with the result that the Company's exposure to bad debts is insignificant. The risk is further mitigated because the Company holds the title to the real estate properties with outstanding installment contracts receivable balance and the Company can repossess such real estate properties upon default of the customer in paying the outstanding balance. The Company’s policy is to enter into transactions with a diversity of credit-worthy parties to mitigate any significant concentration of credit risk. There are no significant concentrations of credit risk within the Company.

b. The credit risk on the financial assets of the Company such as cash and

cash equivalents, short-term investments, equity instruments designated at fair value through other comprehensive income, refundable deposits and other receivables may arise from default of the counterparty. The Company manages such risks in accordance to its policy wherein the Company shall enter into transactions with a diversity of creditworthy parties to mitigate any significant concentration of credit risks. As such, there are no significant concentrations of credit risks in the Company.

Interest Rate Risk

This is the risk arising from uncertain future interest rates. The Company’s financial instruments consist of installment contracts receivables, contract assets, cash and cash equivalents and short-term investments, refundable deposits and other receivables. Interest rates on these assets are fixed at their inception and are therefore not subject to fluctuations in interest rates.

Market Risk This is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Financial instruments which are measured at fair value are subject to market risk. The equity instruments designated at fair value through other comprehensive income are exposed to market risk. There is a risk for a decline in the value due to changes in the market. The exposure, however, is negligible because the amount of the said investment is insignificant as compared to the financial assets of the Company.

Liquidity Risk

This is the current and prospective risk to earnings or capital from a company’s inability to meet its obligations when they become due without incurring unacceptable losses. The Company’s treasury has a well-monitored funding and settlement management plan. The following is the liquidity risk management framework maintained by the Company: a. Asset-Liability Management: Funding sources pertain to short-term

borrowings. Funding sources are abundant and provide a competitive cost advantage. The Company also holds financial assets for which there is a liquid market and are, therefore, readily saleable to meet liquidity needs.

b. Conservative/Liability Structure: Funding is widely diversified. There is

little reliance on wholesale funding services or other credit sensitive fund providers. The Company accesses funding across a diverse range of markets and counter parties.

c. Excess Liquidity: The Company maintains considerable excess liquidity to

meet a broad range of potential cash outflows from business needs including financial obligations.

d. Funding Flexibility: The Company has an objective to maintain a balance

between continuity of funding and flexibility through the use of commercial papers.

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The Company is also exposed to risks which are beyond financial:

COMPANY’S BUSINESS AND OPERATIONS Land Banking The Company’s land banking consists of parcels of land wherein some lots are

being leased while awaiting the development of its condominium projects. Having enough and diversified land banking is important to support the sustainability of the Company’s business. The Company may be exposed to risks because of the possible changes in the value of these lots due to market circumstances which may result in impairment or decline in rental rate levels. The Company currently has two (2) prime lots for future development which are located in Metro Manila. The management is also in continuous study and research on the possible land acquisition which will depend on the need of the Company and negotiations with prospective sellers. For the land value changes, the Company continues to be cautious in buying new properties by conducting studies of appraisal reports and conditions of the property within the vicinity.

Property development and construction

Construction of a condominium project starts from the planning and securing of permits, to the development or construction of the project and to the delivery or turnover of the units to the buyers. The construction of a project involves an average period of three to four years to complete the building. During this period, the Company may be exposed to the following risks:

• delays or longer than expected time of securing necessary licenses, permits and approvals from different government agencies or neighborhood;

• possible increase in cost of materials and labor which will impact pricing and costing;

• labor disputes among and with the contractors and sub-contractors; and

• delay in the delivery of the project. These risks are managed by the Company as follows:

• well-planned and carefully-phased project development with a reasonable timetable;

• concrete sources of financing of the project; • accreditation and careful selection of general contractors and sub

contractors to ensure fulfillment and quality of work; and • continuous and meticulous management of the Company’s project

development team to ensure that the project is progressing and being accomplished according to plan.

ECONOMIC FACTORS Economic T The Company’s business consists mainly of providing office and housing units

in the Philippines and the results of the operations will be influenced by the general conditions of the Philippine economy. Any economic instability or failure to register improved economic performance in the future may adversely affect the Company’s operations and eventually its financial performance.

Effect of climate change

It cannot be denied that the country is already experiencing the impact of climate change which is considered as a global problem which needs to be addressed by all countries. Climate change has greatly affected the operations of the businesses, both private and local. Due to climate change, the supply or resources may decline which will lead to increase in cost. Thus, businesses should consider measures to cope with the impact of environmental changes. Aside from considering the impact, businesses should also take its role in ensuring its compliance with the rules and regulations imposed by the environmental authorities. Cityland Group has invested considerable effort in the development of

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programming approaches that integrate disaster risk management with long-term programs that have the objective of addressing the underlying causes of vulnerability. This means developing and applying various prevention, mitigation and preparedness policies, strategies and practices to minimize vulnerabilities and disaster risks. The Group firmly believes that emergency preparedness planning is a critical component for all development programming and is a necessary ingredient not only for effective emergency response but also for effective risk prevention, mitigation and preparedness before a disaster occurs. For the Group, emergency preparedness encompasses all aspects of disaster risk management – from addressing underlying causes to responding in times of emergencies. First and foremost, preparedness must focus on prevention and mitigation – taking pre-emptive measures to help communities avoid emergencies and become better equipped so that the impact of disasters are reduced. As one of the criteria set by the Group in acquisition of property, the Group considers whether the location of the prospective property is within the fault line and whether the area is prone to flooding. In this case, the Group minimizes the risk of incurring any additional costs/damages in the future. Further, the Company has adopted the following controls to ensure its compliance with the environmental laws but not limited to: • Tree planting activities as required by the Board of Investments (BOI)

for the Company’s BOI-registered projects; • Appointment of Pollution Control Officers in all condominium projects;

and • Avoiding hazards and mitigating their potential impacts by reducing

vulnerabilities and exposure and enhancing capacities of communities.

Political The Company’s business like all other businesses may be influenced by the political situation in the country. Any political instability in the future could have a material adverse effect in the Company’s business.

Industry The industry is characterized by boom-bust cyclical pattern exhibited in the

past couple of decades where the industry normally goes through years of robust growth following years of slowdown. In 2020, the effects of the COVID-19 pandemic had caused a significant impact on the real estate industry. With the united effort of the government, businesses and the people, the Philippine economy will recover in due time. The Company has adopted business continuity plans and strategies to mitigate the impact.

Competition

The demand for housing especially in the medium-cost category has moderately stepped up. The situation has attracted both old and new players to develop projects that cater to this rising demand. As a result of the foregoing, competition in the area of medium-cost development is expected to intensify. The Company believes that it is in a better position to cope with the competition because of the affordability of the projects it offers in the market.

Asset Price Bubble Asset price bubble in real estate occurs when there is a seeming increase in the demand for housing units which leads the developers to build more and when there is already a significant gap between the demand and the supply, this will lead to a sudden decline in the value of the properties. The Philippine Residential Real Estate Price Index (RREPI) is a measure of the average change in the prices of various types of housing units, i.e., single detached/attached houses, duplexes, townhouses and condominium units, based on banks’ data on loans used to acquire new housing units. It is a chain-linked index, which is computed using the average appraised value per square meter, weighted by the share of floor area of each type of housing unit to the total floor area of all housing units. The RREPI is used as an indicator for assessing the real estate and credit market conditions in the country. The country’s property sector remained strong during the 1st half of 2020. This

24

was evidenced by the RREPI which rose by 12.6% year-on-year in the 1st quarter of 2020, as compared to 3.2% and 10.4% growth rate as of 1st quarter and 4th quarter of 2019, respectively. The index continued to grow on the 2nd quarter of 2020 with 27.1% growth rate. This resulted to be the highest year-on-year growth rate since the start of the series in 1st quarter of 2016. According to the banks, there are several reasons to the significant increase in the index. One of these is the higher demand for high-end projects that increased the average price per square meter (sqm). However, the growth had disrupted when it contracted by 0.4% during the 3rd quarter of the same year, the first ever recorded negative year-on-year growth since 2016. The decline was caused by weak consumer demand for houses and lots. The index recovered when it rose by 0.8% in a year-on-year basis during the 4th quarter. According to the Governor of the Bangko Sentral ng Pilipinas (BSP), it is unlikely for the country to have a pandemic-induced asset price bubble as the monetary authorities do not expect any undue surges in asset prices since property prices and for both office and residential segments have come down. Further, market analysts do not see recovery in prices in the coming months as the market sentiment takes time to recover and solidify which lessens the risk of asset bubble. The Governor also ensured the public that the BSP continues to closely monitor market conditions for any signs of imbalances or the potential presence of asset bubbles. As the demand for warehouses and offices arise during these times, the Group considers this as an opportunity to minimize exposure to asset price bubble by focusing on the in-demand real estate commercial projects with good office location and reasonable price.

The Company manages the above risks by conducting assessments of the economic and political situations of the country as well as new developments in the industry. The procedures involve the gathering of information of economic indicators and political events as well as being aware of the new developments in the industry through media, business conferences, economic briefings and other sources. With this information, the Company is able to assess and manage the risks mentioned above.

MANAGEMENT’S DISCUSSION AND ANALYSIS Plan of Operations The Company will continue to maintain a cautious stance in order to continuously achieve a healthy financial position. This will ensure that the development and construction of all its ongoing project will be delivered on time or even ahead of its scheduled turnover. The Company will also continue to scout and develop quality projects suited for the middle and working class that will be situated at convenient locations with affordable and flexible payment terms. The Company’s projects will be funded through cash generated from operations. The Company plans to remain liquid in order to avail attractive investment opportunities to meet the demands of the present growing economy. Financial Condition (March 31, 2021 vs. December 31, 2020) The Company’s balance sheet as of March 31, 2021 remained solid with total assets of P=2.56 billion, higher by 2.26% as compared to the balance as of December 31, 2020 of P=2.50 billion. The increase in total assets was significantly due to the increase in real estate properties for sale and real estate properties held for future development. The percentage of completion of the Company’s on-going project continue to progress as it goes near its estimated completion date.

Excess funds were placed in short-term investments to maintain liquidity and generate additional interest income. The financial position remained stable as total cash and cash equivalents and short-term investments stood at P=236.63 million and P=236.81 million, as of March 31, 2021 and December 31, 2020, respectively.

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On the liabilities side, total liabilities increased by 10.53% from P=275.75 million as of December 31, 2020 to P=304.78 million as of March 31, 2021. This was primarily due to the increase in accrued development costs.

Total equity as of March 31, 2021 stood at P=2.26 billion from P=2.23 billion as of December 31, 2020, higher by 1.24%, due to comprehensive income of P=27.54 million.

As a result of the foregoing, the Company registered current and acid test ratio of 5.94:1 and 1.07:1 as of the first quarter of 2021, as compared to 6.98:1 and 1.40:1 as of December 31, 2020. Asset-to-liability remained stable at 8.40:1 in March 31, 2021 as compared to 9.08:1 in December 31, 2020. Financial Condition (2020 vs. 2019) The Company’s financial position remained stable in 2020 with total assets of P=2.50 billion, 2.33% higher as compared to the 2019 year-end balance of P=2.45 billion. Majority of the funds were used for operations and to finance the ongoing project, One Taft Residences, resulting to the increase in real estate properties for sale. The decrease in contract assets was due to right to consideration delivered resulting to increase in installment contracts receivable. Cash and cash equivalents decreased to P=178.31 million from P=237.66 million due to shift to short-term investments. On the liabilities side, total liabilities decreased to P=275.75 million, 3.08% lower than last year’s amount of P=284.50 million. This was substantially due to decrease in Income Tax Payable resulting from lower income for 2020. Total equity stood at P=2.23 billion as of December 31, 2020, slightly higher by 3.04% compared with the 2019 year-end balance of P=2.16 billion. The increase was due to the total comprehensive recognized in 2020 amounting to P=107.52 million less cash dividends paid of P=41.39 million. As a result of the foregoing, the Company strengthened its liquidity position, with current and acid test ratio of 6.98:1 and 1.40:1 as of December 31, 2020, as compared to 6.82:1 and 1.61:1 as of December 31, 2019. Asset-to-liability and debt-to-equity registered at 9.08:1 and 0.00:1 as of December 31, 2020 from December 31, 2019 ratios of 8.60:1 and 0.00:1, respectively. Financial Condition (2019 vs. 2018) The Company maintained a healthy financial position as it ended the 2019 with total assets of P=2.45 billion slightly lower by 1.89% compared to the 2018 year-end balance. The Company’s funds were utilized for operations and to finance the ongoing project, One Taft Residences, resulting to the increase in real estate properties for sale. Investment of funds were shifted to shorter period investments to maintain liquidity necessary for operations resulting to the increase in cash and cash equivalents account. The financial position at the end of 2019 remained stable as cash and cash equivalents and short-term investments stood at P=237.66 million and P=10.00 million, respectively. On the liabilities side, total liabilities decreased by P=161.78 million or 36.25%. This was substantially due to the full settlement of notes and contracts payable and decrease in contract liabilities. Total equity stood at P=2.16 billion, slightly higher by 5.59% from 2018 year-end balance of P=2.05 billion due to comprehensive income of P=171.42 million, net of cash dividends of P=56.89 million. As a result of the foregoing, the Company strengthened its liquidity position, with current and acid test ratio of 6.82:1 and 1.61:1 as of December 31, 2019, as compared to 4.58:1 and 2.35:1 as of December 31, 2018. Asset-to-liability and debt-to-equity registered at 8.60:1 and 0.00:1 as of December 31, 2019 from December 31, 2018 ratios of 5.59:1 and 0.10:1, respectively. Financial Condition (2018 vs. 2017) The Company’s total assets reached P=2.49 billion, 13.44% higher as compared to the 2017 year-end balance of P=2.20 billion. The increase in total assets can be attributed to the acquisition of a real estate property resulting to the increase in real estate properties for future development. In addition, due to the adoption of Philippine Financial Reporting Standards (PFRS) 15, Revenue from Contracts with Customers in 2018, a substantial portion of receivables from installment sales was classified from installment contracts receivable to contract assets. The net increase of receivables from sales of real estate properties was due to sales

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generated from real estate properties. Funds were generated significantly from sales and lease of condominium units, while other financial sources came from the issuance of commercial papers with interest rates ranging from 1.31% to 5.00% in 2018. Majority of the funds were utilized for operations and to finance the construction of the condominium projects, North Residences and One Taft Residences. In June 2018, the Company declared a total of P=38.18 million cash dividend. The financial position remained stable as cash and cash equivalents and short-term investments stood at P=84.29 million and P=536.00 million, respectively. Excess funds were placed in short-term investments at higher interest rates as compared to the previous year resulting to the increase in financial income. On the liability side, total liabilities increased by P=177.10 million or 65.79%. This can be attributed to the increase in notes and contracts payable. In 2018, the Company recorded contract liabilities amounting to P=162.39 million as a result of the adoption of PFRS 15. This was partially offset by the settlement of accounts payable and accrued expenses by P=37.77 million. Total equity stood at P=2.05 billion as of December 31, 2018, higher by 6.13% from P=1.93 billion as of December 31, 2017 due to comprehensive income of P=150.73 million net of cash dividends declared and paid by the Group amounting to P=38.18 million plus P=5.80 million from adjustments to effect adoption to new accounting standards. As a result of the foregoing, the Company translated to a current and acid test ratio of 4.58:1 and 2.35:1 as of 2018, as compared to 6.59:1 and 4.39:1 as of December 31, 2017. Asset-to-liability and debt-to-equity registered to 5.59:1 and 0.10:1 from 2017 year-end balance of 8.17:1 and 0.08:1, respectively. Results of Operation (March 31, 2021 vs. March 31, 2020)

Sales of real estate properties reached P=129.43 million as of March 31, 2021 as compared to the previous year’s sales of P=73.09 million. Sales for the first quarter came from sale of condominium units of One Taft Residences and North Residences. The increase in sales amount was attributed to the increase in the percentage of completion since revenue from the sale of these real estate projects under pre-completion stage are recognized over time during the construction period (or percentage of completion). Other sources of income are financial income, rent income and other income. Financial income which is composed of interest income from sale of real estate properties, cash and cash equivalents and short-term investments accounted for 12.15% of total revenues. Likewise, rental income amounted to P=1.43 million as of the first quarter of 2021 as compared to P=1.73 million of the same period last year. Other income - net, on the other hand, pertains to adjustment of market value of repossessed units, penalties charged to clients, gain on sale of shares of stock and other miscellaneous income. Revenue contribution of this account amounted to P=1.4 million and P=0.62 million as of March 31, 2021 and 2020, respectively.

On the cost side, cost of real estate sales increased as this moves in tandem with the sales of real estate properties. In addition, provision for income tax decreased due to lower tax rate as an impact of the approval of CREATE Act.

As a result of the foregoing, the Company recorded a net income as of March 31, 2021 of P=27.14 million as compared to P=24.04 million as of March 31, 2020. This translated into an annualized earnings per share and return on equity of P=0.08 and 4.81%, respectively as compared to the same period last year of P=0.07 and 4.40%, respectively. Results of Operation (2020 vs. 2019) Revenue from real estate properties reached P=253.55 million, lower by 50.63% over the same period last year of P=513.55 million. The decline was due to lower sales which can be attributed to the financial crisis brought about by COVID-19 and lower percentage of completion of One Taft Residences. The project resulted to a 73.27% completion as of December 31, 2020 from 60.06% as of December 31, 2019. The increase in percentage of completion decreased from 34.47% to 13.21% due to quarantine measures being implemented by the government to contain the spread of the COVID-19 virus. Other sources of income are financial income, rent income and other income. Financial income which is composed of interest income from sale of real estate properties, cash and cash equivalents and short-term investments accounted for 21.88% of total revenues. Likewise, rent income declined by 19.65% in 2020 as compared to the same period last year due to the rent concessions provided to the tenant. Net other income, on the other hand, pertains to penalties for buyers’ late payments, sale of scraps, gain on sale of share of

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stock and net gains or losses on forfeiture/cancellation of sales. Revenue contribution of this account amounted to P=18.04 million and P=9.79 million as of December 31, 2020 and December 31, 2019, respectively. On the cost side, cost of real estate sales and operating expenses decreased due to lower sales, while financial expenses decreased also due to lower service and discount charge. As a result of the foregoing, the Company recorded a net income of P=104.55 million, lower by 40.50% as compared to last year’s generated total revenue of P=354.47 million. Earnings per share and return on equity resulted to P=0.07 and 4.69%, respectively in 2020 as compared to the previous year of P=0.12 and 8.12%, respectively. Results of Operation (2019 vs. 2018) Total sales of real estate properties reached P=513.55 million, higher by 23.89% over the same period last year of P=414.51 million. The increase in sales was due to higher sales and percentage of completion of One Taft Residences. The project was in full blast construction resulting to a 60.06% completion in December 2019 from 25.59% in December 2018. Other sources of income are financial income, rent income and other income. Financial income which is composed of interest income from sale of real estate properties, cash and cash equivalents and short-term investments accounted for 15.80% of total revenues. Likewise, rent income grew by 76.23% in 2019 as compared to the same period last year. Other income, on the other hand, pertains to adjustment of market value of repossessed units, penalties charged to clients, and other miscellaneous income. Revenue contribution of this account amounted to P=9.79 million and P=6.49 million as of December 31, 2019 and December 31, 2018, respectively. On the cost side, cost of real estate sales and operating expenses increased due to higher sales, while financial expenses increased due to higher referral fees. As a result of the foregoing, the Company recorded a net income of P=175.71 million, higher by 17.37% generated from total revenue of P=629.43 million. Earnings per share and return on equity resulted to P=0.12 and 8.12%, respectively in 2019 as compared to the previous year of P=0.10 and 7.31%, respectively. Results of Operation (2018 vs. 2017) Revenue on sales of real estate properties reached P=414.51 million as compared to the same period last year of P=442.48 million. The decrease in sales can be attributed to the sales revenue generated from One Taft Residences. As of December 31, 2018, percentage of completion of this project reached 25.59% and will eventually increase as the construction advances. In addition, sales of Grand Emerald Tower and Manila Residences Bocobo came from the remaining units of last year’s inventory. With the completion of North Residences in the first quarter of 2018, the Company is optimistic that this project will generate higher revenues. Majority of the sales in 2018 were generated from North Residences which accounted for 76.85%, while One Taft Residences accounted for 19.00% of total sales. The remaining 4.15% of sales were generated from the sale of Grand Emerald Tower and Manila Residences Bocobo. Other sources of income are financial income, rent income and other income. Financial income which is substantially composed of interest income from sale of real estate properties and interest from investments in banks increased by 11.01% as compared to the same period last year due to higher interest income from sale of real estate properties and from cash investments. In addition, higher interest rates increased interest income from cash investments while additional lease contracts entered and higher rental rates increased rent income by 36.99%. On the cost side, cost of real estate sales and operating expenses decreased since these accounts move in tandem with sales. Provision for income tax increased due to higher taxable income since the income tax holiday entitlement of North Residences expired last August 2017 rendering to higher taxable income. Altogether, the Company ended 2018 with a net income of P=149.70 million, 14.23% higher than the previous year’s level of P=131.05 million. This translated to an improved earnings per share and return on equity of P=0.10 and 7.31%, and P=0.10 and 6.79% in 2018 and 2017, respectively.

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Key Performance Indicators 2020 2019 2018 Current ratio 6.98 6.82 4.58 Asset-to-equity ratio 1.12 1.13 1.22 Debt-to-equity ratio – – 0.10 Asset-to-liability 9.08 8.60 5.59 Solvency ratio 0.38 0.62 0.34 Interest rate coverage ratio – – – Acid - test ratio 1.40 1.61 2.35 Return on equity 4.69% 8.12% 7.31% Return on asset 4.18% 7.18% 6.00% Net profit margin 29.50% 27.92% 29.42% Earnings per share P=0.07 P=0.12 P=0.10*

*After retroactive effect of 5% stock dividends in 2019. Manner of Calculation:

Current ratio

=

Total current assets / Total current liabilities

Asset-to-equity ratio = Total assets

Total equity (net of net changes in fair value of financial assets at fair value through other comprehensive income and accumulated re-measurement on defined benefit plan)

Debt-to-equity ratio = Notes and contracts payable

Total equity (net of net changes in fair value of financial assets at fair value through other comprehensive income and

accumulated re-measurement on defined benefit plan)

Asset-to-liability ratio

=

Total assets / Total liabilities

Solvency ratio =

Net income after tax + Depreciation expense

Total liabilities

Interest rate coverage ratio

=

Net income before tax + Depreciation expense + Interest expense

Interest expense

Acid-test ratio = Cash and cash equivalents + Short-term investments +

Installment contracts receivable, current + Contract assets, current + Other receivables, current

Total current liabilities

Return on equity ratio

=

Net income after tax

Total Equity

Return on assets ratio = Net income after tax Total Assets Net profit margin = Net income after tax Total Revenue Basic/Diluted Earnings per share

=

Net income after tax

Outstanding number of shares

1. Any Known Trends, Events or Uncertainties (Material Impact on Liquidity)

The COVID-19 pandemic has caused business disruptions due to the community quarantines implemented over Luzon. The Company’s liquidity was affected due to the decline in sales of real estate properties and lower collections as a result of higher number of forfeitures.

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2. Internal and External Sources of Liquidity

Internal sources come from sales of condominium and real estate projects, collection of installment receivables and maturing short-term investments. External sources come from commercial papers.

3. Any Material Commitments for Capital Expenditures and Expected Sources of Funds of such Expenditures

There are no material commitments for capital expenditure.

4. Any Known Trend or Events or Uncertainties (Material Impact on Net Sales or Revenues or Income)

On March 16, 2020, Philippine President Rodrigo Duterte declared the entire Luzon area under “enhanced community quarantine” restricting movement of the population in response to the growing pandemic of the Coronavirus disease 2019 (COVID-19) in the country. This has been extended in the National Capital Region and in some other affected areas until May 31, 2020.

Starting June 1, 2020, NCR and other parts of the Philippines were declared to be under general community quarantine (GCQ), until June 15, 2020. The GCQ was further extended until June 30, 2020, then again until July 15, 2020. Afterwards, the GCQ was extended until July 30, 2020. On August 3, 2020, the President of the Philippines reverted Metro Manila, and the provinces of Laguna, Cavite, Rizal and Bulacan to modified enhanced community quarantine from general community quarantine from August 4, 2020 until August 18, 2020. Starting August 19, 2020, Metro Manila, as well as the provinces of Laguna, Cavite, Rizal, and Bulacan, returned to general community quarantine unless earlier lifted or extended.

As of March 31, 2021, Metro Manila and some nearby provinces were placed under the enhanced community quarantine due to the surge in the number of COVID cases. The quarantine measures were implemented in order to manage the spread of the virus.

The COVID-19 pandemic has caused disruptions in the Company’s business activities. Further, the scale and duration of the impact of the pandemic remain uncertain as at the report date. It is not possible to estimate the overall impact of the outbreak’s near-term and longer effects. The outbreak could have a material impact on the Company’s financial results for the rest of 2021 and even periods thereafter. As this global problem evolves, the Company will continually adapt and adjust its business model according to the business environment in the areas where the Company operates, in full cooperation with the national and local government units.

5. Any Significant Elements of Income or Loss that did not arise from Registrant’s Continuing

Operations

There is no significant element of income or loss that did not arise from registrant’s continuing operations.

6. Any Known Trends or Events or Uncertainties (Direct or Contingent Financial Obligation)

There are no events that will trigger direct or contingent financial obligation that is material to the Company.

7. Any Known Trends or Events or Uncertainties (Material Off-balance Sheet Transactions,

arrangements, Obligations and Other Relationships)

There are no material off-balance sheet transactions, arrangements, obligations and other relationships of the Company with unconsolidated entities or other persons created during the reporting period.

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8. Causes for any Material Changes from Period to Period in One or More Lines of the Registrant's Financial Statements. Financial Condition (March 31, 2021 vs. December 31, 2020)

a. Increase in Cash and Cash Equivalents was due to sales, collection and shift of placements to

shorter term investments. b. Decrease in Short-term Investments was shift of placements to shorter term investments.. c. Decrease in Installment Contracts Receivable was due collection of receivables from clients. d. Decrease in Contract Assets was due to collection from sales of real estate properties. e. Decrease in Cost to Obtain Contract was due to the recognition of commission expense relative

to the increase in percentage of completion of an ongoing project. f. Increase in Real Estate Properties for Sale was due to construction costs incurred as reflected in

the increase in the percentage of completion of the Company’s on-going project. g. Decrease in Financial Assets at Fair Value through Other Comprehensive Income (FVOCI)

was due to decrease in market value of shares of stock. h. Increase in Other Receivables was due to higher due from related parties and advances to

customers. i. Increase in Prepaid Tax was due to the reduction in regular corporate income tax rate as an

impact of the CREATE Act which was passed into bill on March 26, 2021. The reduction in the tax rate is effective July 1, 2020.

j. Increase in Real Estate Properties for Future Development was due to additional development costs incurred as of March 31, 2021.

k. Decrease in Other Assets was due to utilization of input VAT and prepaid expenses. l. Increase in Accounts Payable and Accrued Expenses was substantially due to higher accrued

expense on development costs and directors’ fee and increase in withholding taxes payable. m. Decrease in Contract Liabilities was due to increase in percentage of completion which

satisfied the payments made by the clients. n. Decrease in Income Tax Payable was due to the reduction of tax rate as an effect of the

CREATE Act. o. Decrease in Deferred Income Tax Liabilities was due to remeasurement as an effect of the

CREATE Act. p. Decrease in Unrealized Fair Value of Investments on FVOCI was due to decrease in market

value of shares of stock. q. Decrease in Accumulated Re-measurement Loss on Defined Benefit Plans -

net of deferred income tax effect was due to the remeasurement of the deferred income tax as result of the reduction in tax rate.

r. Increase in Retained Earnings was due to the comprehensive income recognized as of March 31, 2021.

Financial Condition (2020 vs. 2019) a. Decrease in Cash and Cash Equivalents was due to payment of liabilities and shift of placements

to short term investments. b. Increase in Short-term Investments was due to the shift of funds to short term investments. c. Increase in Installment Contracts Receivable was due to uncollected past due accounts. Further,

the collections of monthly amortizations were also affected due to the impact of COVID-19 pandemic.

d. Net decrease in Contract Assets was due to right to consideration already delivered resulting to increase in billed accounts reflected in the installment contracts receivable.

e. Net decrease in Cost to Obtain Contract was due to the recognition of commission expense relative to the increase in percentage of completion of the ongoing project.

f. Net increase in Other Receivables was due to higher advances to condominium corporations, payment of real estate tax and retention on cash sales.

g. Increase in Real Estate Properties for Sale was due to additional development cost incurred for the ongoing project.

h. Increase in Financial Assets at FVOCI was due to increase in fair market value of the shares of stock held by the Company.

i. Increase in Real Estate Properties Held for Future Development was due to capitalized cost. j. Decrease in Deferred Income Tax Assets was due to decrease in realized gain on sale of real

estate transactions. k. Increase in Other Assets was due to payment of prepaid real estate tax.

31

l. Increase in Accounts Payable and Accrued Expenses was substantially due to higher accrued development costs, sick leave, customers’ deposit and due to related parties.

m. Decrease in Income Tax Payable was due to creditable withholding tax charged to income tax payable and decrease in taxable income.

n. Decrease in Retirement Benefit Liability was due to re-measurement gain recognized during the year.

o. Increase in Unrealized Fair Value Changes on Financial Assets at FVOCI was due to increase in value of shares of stock.

p. Increase in Retained Earnings was due to net income recognized during the year net of stock dividends declared and distributed.

Financial Condition (2019 vs. 2018)

a. Increase in Cash and Cash Equivalents was due to sales, collection and shift of placements to

shorter term investments. b. Decrease in Short-term Investments was substantially due to shift of funds to shorter period

investments, payment of construction costs and operating expenses, full settlement of notes and contract payables and payment of cash dividends.

c. Decrease in Installment Contracts Receivable was due to collection of past due accounts. d. Net increase in Contract Assets was due to higher sales and increase in the percentage of

completion of an on-going project. e. Net decrease in Cost to Obtain Contract was due to the recognition of commission expense

relative to the increase in percentage of completion of an ongoing project. f. Increase in Real Estate Properties for Sale was due to additional development cost incurred for

the ongoing project. g. Decrease in Financial Assets at Fair Value through Other Comprehensive Income (FVOCI) was

due to sale of shares of stock and decrease in fair market value of the shares of stock held by the Company.

h. Net decrease in Other Receivables was substantially due to lower accrual of interest receivable, collection of advances to customers, condominium corporations and from related parties.

i. Decrease Real Estate Properties for Future Development was due to cost adjustment resulting to settlement of the remaining balance of the contract payable.

j. Decrease in Deferred Income Tax Assets was due to decrease in realized gain on sale of real estate transactions and unearned revenue.

k. Decrease in Other Assets was due to utilization of prepaid expenses. l. Increase in Accounts Payable and Accrued Expenses was substantially due to higher accrued

development costs, sick leave, director’s fee, customers’ deposit and due to related parties. m. Decrease in Notes and Contract Payable was due to full settlement of notes payable and

adjustment of contract payable resulting to its full settlement. n. Increase in Income Tax Payable was due to the higher taxable income. o. Decrease in Unrealized Fair Value Changes on Financial Assets at FVOCI was due to sale of

shares of stock and decrease in fair market values. p. Increase in Retained Earnings was due to net income recognized as of December 31, 2019, net

of cash dividends.

Financial Condition (2018 vs. 2017)

a. Decrease in Cash and Cash Equivalents and Short-term Investments was substantially due to payment of operating and development cost, payment of cash dividends and acquisition of a new property.

b. Decrease in Installment Contracts Receivables was due to adoption of PFRS 15, Revenue from Contracts with Customers.

c. Increase in Contract Assets was due to sales of real estate properties and reclassification of Installment Contracts Receivable due to the adoption of PFRS 15.

d. Decrease in Other Receivables was due to collection of advances from customers and retention from cash sales.

e. Increase in Real Estate Properties for Sale was primarily due to transfer from real estate properties for future development and additional construction/development costs incurred.

f. Increase in Financial Assets at Fair Value through Other Comprehensive Income (FVOCI) was due to adoption of PFRS 9, Financial Instruments wherein available for sale financial assets were reclassified as financial assets at FVOCI.

32

g. Decrease in Available-for-sale-securities was due to reclassification made to Equity Instruments designated at Fair Value through Other Comprehensive Income.

h. Increase in Real Estate Properties Held for Future Development was primarily due to the newly acquired property.

i. Decrease in Deferred Income Tax Assets was due to adjustment in contract asset and effect on adoption of new accounting standard.

j. Increase in Other Assets was due to payment of prepaid real estate tax. k. Decrease in Accounts Payable and Accrued Expenses was due to decrease in development costs. l. Increase in Contract Liabilities was due to adoption of PFRS 15. m. Increase in Notes and Contracts Payable was due to proceeds from issuance of short-term notes

payable and contract balance payable on the newly acquired property. n. Increase in Income Tax Payable was due higher taxable income. o. Decrease in Retirement Benefits Liabilities was due to increase in fair value of plan assets. p. Decrease in Unrealized Fair Value Changes on Financial Assets at FVOCI/Net Changes in Fair

Values of AFS financial assets was due to decrease in market value of shares of stock. q. Increase in Retained Earnings was due to net income recognized during the year net of stock

and cash dividends declared and distributed. Results of Operation (March 31, 2021 vs. March 31, 2020)

a. Increase in Sales of Real Estate Properties was due to increase in the percentage of completion

of the ongoing project. Revenue from the sale of these real estate projects under pre-completion stage are recognized over time during the construction period (or percentage of completion).

b. Decrease in Financial Income was due to lower interest income earned from cash and cash equivalents and short-term investments.

c. Decrease in Rent Income was due to the lower income from short-term leases. d. Increase in Other Income was due to recognition of the increase in fair market values of

repossessed units. e. Increase in Cost of Real Estate Sales was due to increase in the percentage of completion as this

moves in tandem with the sale of real estate properties. f. Decrease in Operating Expenses was due to lower taxes and licenses, repairs and maintenance

and outside services. g. Decrease in Financial Expenses was due to lower finance charges. h. Decrease in Provision for Income Tax was due to the lower tax rate based on the CREATE Act.

Further, the provision for income tax as of March 31, 2021 includes the difference of the provision for income tax reflected in the 2020 audited financial statements and the provision for income tax shown in the income tax return.

i. Increase in Net Income was due to increase in realized gross profit as a result of increase in the percentage of completion and lower provision for income tax as an impact of the implementation of CREATE Act.

Results of Operation (2020 vs. 2019) a. Decrease in Sales of Real Estate Properties was due to lower sales as a result of the COVID-19

pandemic. b. Decrease in Financial Income was primarily due to lower interest income earned from money

market placements. c. Decrease in Rent Income was due to lower rentals earned from units for lease. d. Increase in Other Income was due to increase in fair market value of repossessed units. e. Decrease in Cost of Real Estate Sales was due to lower sales and percentage of completion of

One Taft Residences because of the quarantine measures implemented causing the construction to slow down.

f. Decrease in Operating Expenses was substantially due to lower personnel expenses, professional fees, taxes and licenses, insurance, repairs and maintenance and brokers’ commission because of the pandemic.

g. Decrease in Financial Expenses was due to lower service and discount charges. h. Decrease in Provision for Income Tax was due to lower taxable income. i. Decrease in Net Income was due to lower revenues from sale of real estate properties, interest

and rental income.

33

Results of Operation (2019 vs. 2018) a. Increase in Sales of Real Estate Properties was due to higher sales and percentage of

completion of One Taft Residences. b. Increase in Financial Income was primarily due to higher interest income earned from

installment contracts receivable, contract assets and short-term investments. c. Increase in Rent Income was due to increase in rental rates and adjustments for the reversal of

deposits to rental income for pre-terminated contracts. d. Increase in Other Income was due to increase in fair market values of repossessed units and

gain on sales of shares of stock. e. Increase in Cost of Real Estate Sales was due to higher sales and percentage of completion of

One Taft Residences. f. Increase in Operating Expenses was substantially due to higher sales, personnel expenses,

professional fees, taxes and licenses, insurance, repairs and maintenance and brokers’ commission.

g. Increase in Financial Expenses was due to increase in finance charges. h. Decrease in Other Expenses was due to lower adjustment of prior years’ income of

forfeited/cancelled contracts. i. Increase in Provision for Income Tax was due to higher taxable income.

Results of Operation (2018 vs. 2017) a. Decrease in Sales of Real Estate Properties was due to lower sales generated from the sale of

the remaining units of Grand Emerald Tower, Manila Residences Bocobo and North Residences.

b. Increase in Financial Income was due to higher interest income earned from installment contracts receivable and contract assets.

c. Increase in Rent Income was due to additional lease contracts and higher rental rates. d. Increase in Other Income was due to increase in fair market value of repossessed real estate

properties for sale and collection of penalty and processing fee. e. Decrease in Cost of Real Estate Sales was due to lower sales as this moves in tandem with the

sale of real estate properties. f. Decrease in Operating Expenses was primarily due substantially due to lower sales, personnel

expenses, brokers’ commission and advertising and promotions. g. Increase in Financial Expenses was due to increase in notes payable balance and higher interest

rates. h. Increase in Other Expenses was due to forfeiture/cancellation of prior years’ sales. i. Increase in Provision for Income Tax was due to higher taxable income. j. Increase in Net Income was due to higher financial income, rent income and other income.

9. Information on Independent Auditor

Sycip Gorres Velayo & Co. is the company’s external auditor for the years 2020 and 2019. The engagement partner is Ms. Aileen L. Saringan in 2020 and 2019.

2020 2019 Audit and audit-related Fees P=555,000 P=550,000 Tax Fees – – All other fees – – Total P=555,000 P=550,000

The Company did not avail any non-audit related services from external parties.

The Audit Committee’s approval policies and procedures consist of:

a. Discussion with the external auditors of the Audited Financial Statements. b. Recommendation to the Board of Directors for the approval and release of the

Audited Financial Statements. c. Recommendation to the Board of Directors the appointment of the external auditor.

During the Annual Stockholders’ Meeting of the Company, the appointment of the external auditor and approval of the audited financial statements are being presented for ratification by the stockholders.

34

10. Any Seasonal Aspects that had Material Effect on the Financial Condition or Results of Operations

There are no seasonal aspects that had material effect on the financial condition or results of operations.

DIVIDENDS AND MARKET PRICE OF SHARES OF STOCK a. Cash Dividends Per Share

2020 P=0.029 2019 P=0.042 2018 P=0.029

Cash dividends on common shares were deducted from retained earnings upon declaration by the Board of Directors (BOD). All cash dividends due during the year were paid accordingly based on the approved dates by the BOD.

b. Stock Dividends

No stock dividends were declared in 2020. The Company declared 5% stock dividends in 2019 and 2018. All stock dividends declared during the 2019 and 2018 were distributed accordingly.

Stock dividends on common shares are measured based on the total par value of declared stock dividends. Stock dividends are deducted from retained earnings when the BOD’s declaration is ratified by the stockholders of the Company. Unissued stock dividends are recorded as stock dividends distributable and credited to capital stock upon issuance.

Dividends for the year that are declared after the end of the reporting period but before the approval for issuance of financial statements are dealt with as an event after the reporting period.

c. Any Restrictions that may Limit Ability to Pay Dividends or that are likely to do so in the Future

Dividends declared on shares of stock are payable in cash or in additional shares of stock. Future dividend payments, if any, will depend on the earnings, cash flow and financial condition of the Company and other factors.

The Revised Corporation Code prohibits stock corporations from retaining surplus profits in excess of 100% of their paid-in capital stock, except when justified by definite corporate expansion projects or programs approved by the BOD, or when the corporation is prohibited under any loan agreement with any financial institution or creditor from declaring dividends without its consent, and such consent has not yet been secured, or when it can be clearly shown that such retention is necessary under special circumstances obtaining in the corporation.

d. Stock Prices

High Low 2021 First Quarter 2.34 0.65 2020 First Quarter 0.79 0.65 Second Quarter 0.77 0.54 Third Quarter 0.76 0.66 Fourth Quarter

0.95 0.62

2019 First Quarter 1.05 0.73 Second Quarter 0.89 0.74 Third Quarter 0.84 0.71 Fourth Quarter 0.78 0.70

Note: Prices in 2019 took into account the stock dividends declared to the stockholders

35

e. Trading Market The Company's common equity is traded in the Philippine Stock Exchange. The Company has no plans of acquisition, business combination, or other reorganization that will take effect in the near future that involves issuances of securities.

f. Price Information on the Latest Practicable Date

The Company’s shares were last traded on April 28, 2021 at P=1.98 per share. g. Holders

The number of shareholders of record as of March 31, 2021 was 751. Top 20 Stockholders of record as of March 31, 2021:

Name No. of Shares % 1. Cityland Development Corporation 712,030,839 49.73 2. Cityland, Inc. 422,918,496 29.54 3. PCD Nominee Corporation – Filipino 122,056,793 8.52 4. Cityplans, Incorporated. 12,447,765 0.87 5. Roxas, Stephen C. 12,223,321 0.85 6. Shao, Henry 11,094,363 0.77 7. 8.

Tan, Joyce Liuson or Tan, Philip Sim Liuson, Andrew I.

10,901,636 7,695,178

0.76 0.54

9. Credit & Land Holdings, Inc. 7,373,727 0.52 10. Liuson, Grace C. 6,737,109 0.47 11 Co, Sharon Valerie 5,727,174 0.40 12. Co, Stephanie Vanessa 5,727,174 0.40 13. Co, Stephen Vincent 5,727,174 0.40 14. Lim, Josephine 4,090,838 0.29 15. Ecclesiastes, Inc. 3,692,420 0.26 16. Gohoc, Josef C. 3,004,274 0.21 17. PCD Nominee Corporation – Others 2,898,298 0.20 18. Obadiah, Incorporated 2,509,274 0.18 19. Roxas, Jefferson C. 2,399,867 0.17 20. Jemimah Incorporated 2,364,037 0.17

h. Recent Sale of Unregistered Securities (including recent issuance of securities constituting an exempt transaction) There was no sale of any unregistered securities. The total number of shares issued and outstanding of the Company remains 1,431,785,284 as there was no stock dividend declaration in 2020. Stock dividends are exempted from registration under SRC Rule 10.1-2 (Exempt Transaction Not Requiring Notice).

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There are no changes in and disagreements with accountants on accounting and financial disclosure.

36

COMPLIANCE WITH LEADING PRACTICES ON CORPORATE GOVERNANCE The evaluation system employed by the Company is thru a periodic self-rating system based on the criteria on the leading practices and principles on good governance.

1) Measures being undertaken by the company to fully comply with the adopted Leading Practices on Good Corporate Governance.

We have implemented the periodic self-rating system.

2) Any deviation from the company’s manual of corporate governance (including a disclosure of the name and position of the persons involved and sanctions imposed on said individual).

There were no major deviations that require sanctions.

3) Any plan to improve corporate governance of the Company.

Based on the outcome of the periodic self-rating, we will come up with necessary actions / procedures to improve the corporate governance of the Company.

Pursuant to SEC Memorandum Circular No. 5, Series of 2013, the Corporate Governance Section of the Annual Report has been deleted and to be submitted separately to Securities and Exchange Commission.

37

ACKNOWLEDGEMENT In behalf of the Board of Directors, Consultant and Management of City & Land Developers, Incorporated, I would like to express our appreciation to all our stockholders for your trust and confidence. I also acknowledge the time and expertise shared to us by our consultant and directors and the commitment and hard work of our managers and staff in the attainment of our corporate goals.

With God’s grace, we look forward to a better year in 2021 for the Company and the real estate industry. Upon written request, the Company undertakes to provide without charge a copy of the Annual Report on SEC Form 17A. Copies can be requested from Ms. Michelle Marcelino, 3/F Cityland Condominium 10 Tower I, 156 H.V. Dela Costa Street, Makati City, Tel. 8-893-6060 local 409.

CITY & LAND DEVELOPERS, INC.

I hereby certify that the following Directors and Executive Officers of City & Land Developers, Incorporated for the year 2020 are not elected as public servants, nor appointees, nor employees of any government agency.

Directors: 1. Andrew I. Liuson

2. Stephen C. Roxas

3. Grace C. Liuson

4. Josef C. Gohoc

5. Peter S. Dee

6. Cesar E.A. Virata

7. Helen C. Roxas

8. Benjamin I. Liuson

9. Emma A. Choa

Executive Officers: 1. Rudy Go

2. Melita M. Revuelta

3. Emma C. Jularbal

4. Melita L. Tan

5. Romeo E. Ng

6. Rosario D. Perez

7. Winefreda R. Go

8. Dorothy U. So

9. Jocelyn C. De Asis

Given this 301h day of April 2021.

ruled by;

Atty.A re Anton S. rporate Secre

are ary

MAY 10 2021 SUBSRIBE AND SWORN TO before me, a Notary Public for andW'- this

affiant exhibiting to me his SSS with ID no. 34-4251351-8 and other competent evidence of identification.

ATTY. . LARAL NOTARY UBLIC FOR MAKATI CITY

UNULJUN 30, 202 (r 1--r-En Banc R,58IutiOfl da1 12fQLi.Q2O

AP OINTMENT NO.: M-85 1.p ROLL NO.: 33152

IBP NO.: DT 0l06-20?I:MkaU

3/1' CITYLAND CONDOMINIUM 10 TOWER I, 14 H.V.- OSTA1EEt I1AATI CITY 1226 P.O. BOX 5000 MAKATI 1290 TEL.#: 893-60-60 FAX#: 892-86-56 www.cityIand.net

/

Doc. No. 33c

Page No. Book No. I1 Sees of 2021

C O V E R S H E E T

SEC Registration Number

1 5 2 6 6 1








Form Type Department requiring the report

Secondary License Type, If

Applicable

M S R D Not Applicable

Certification of Independent Director =

Mr. Cesar EA Virata C O M P A N Y I N F O R M A T I O N


[email protected] 02-88936060 0968-5451452

No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)

750 as of 04/30/2021 2nd Tuesday of June December 31




Mr. Rudy Go [email protected] 02-8893-6060 0968-5451452


3/F Cityland Condominium 10 Tower II, 154 H.V. Dela Costa Street, Makati City

NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be

reported to the Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact

details of the new contact person designated.

2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s

records with the Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not

excuse the corporation from liability for its deficiencies.

CERTIFICATION OF INDEPENDENT DIRECTOR

I, CESAR E. A. VLRATA, Filipino, of legal age and a resident of 105 Palm One Serendra, 11th

Avenue, Global City, Taguig City, after having been duly sworn to in accordance with law do hereby declare that:

1. I am a nominee for independent director of City & Land Developers, Incorporated and have been its independent director since June 9, 2009.

2. I am affiliated with the following companies or organizations (including Government-Owned and Controlled Corporations):

COMPANY/ORGANIZATION POSITION/RELATIONSHIP PERIOD OF SERVICE

Listed Companies

Rizal Commercial Banking Corp. Vice Chairman 1999-present Director (Non-Executive) 1995-present

Belle Corporation Director (Independent) 1996-present Lopez Holdings Corporation Director (Independent) 2009-present

Non-Listed Companies

ATAR IV Property Holding Co., Inc. Chairman & Director 2012-present Malayan Insurance Company, Inc. Director (Non-Executive) 2004-present RCBC Bankard Services Corp. Chairman 2013-present

Director (Non-Executive) 2001-present RCBC Realty Corporation Director (Non-Executive) 1998-present Business World Publishing Corp. Vice Chairman 2012-present

Director (Independent) 1989 present Malayan Education System, Inc. Trustee 1999-present (operating under the name of Mapua University) Cavitex Holdings, Inc. Chairman 2016-present

Director (Non-Executive) Niyôg Property Holdings, Inc. Director (Non-Executive) 2005-present Luisita Industrial Park Vice Chairman 2012-present

Director (Non-Executive) 1999-present RCBC Land, Inc. President 1999-present

Director (Non-Executive) - YGC Corporate Services, Inc. Director (Non-Executive) 2001-present ALTO Pacific Company, Inc. Chairman 2014-present

Director (Non-Executive) AY Foundation, Inc. Trustee 1997-present Yuchengco Center Trustee 1994-present World Trade Center Management, Inc. Director (Non-Executive) 1995-present Tan Yan Kee Foundation, Inc. Trustee 2008-present WI Support Foundation, Inc. Trustee 1998-present UP Business Research Foundation, Inc. Trustee 2001-present Yuchengco Museum Trustee 2006-present DLSU-Dasmariñas Cultural Heritage Trustee 2000-present UCM Foundation, Inc. Chairman 2020-present Cajel Realty Corporation Director 2020-present

3. I possess all the qualifications and none of the disqualifications to serve as an Independent Director of City & Land Developers, Incorporated, as provided for in Section 38 of the Securities Regulation Code, its Implementing Rules and Regulations and other SEC issuances.

4. I am related to the following director/officer/substantial shareholder of (covered company and its subsidiaries and affiliates) other than the relationship provided under Rule 38.2.3 of the Securities Regulation Code. (where applicable)

5. To the best of my knowledge, I am not the subject of any pending criminal or administrative investigation or proceeding/ I disclose that I am the subject of the following criminal/administrative investigation or proceeding (as the case may be):

6. I shall faithfully and diligently comply with my duties and responsibilities as independent director under. the Securities Regulation Code and its Implementing Rules and Regulations, Code of Corporate Governance and other SEC issuances.

7. I shall inform the Corporate Secretary of City & Land Developers, Incorporated of any changes in the abovementioned information within five days from its occurrence.

IN WITNESS WHEREOF, I have hereunto set my hand on this NAI-Ukli yy

day ofAPR 2J 2O2 02 at

Affiant

SUBSCRIBED AND SWORN to before me this day of APR 2 9 202 12021 at IWAKA,n CITY, afflant exhibiting to me his Tax Identification No. 167-999-197 as competent evidence of

identity.

NAME OF DIRECTOR] OFFICER] COMPANY NATURE OF SUBSTANTIAL SHAREHOLDER RELATIONSHIP

NONE

OFFENSE CHARGED/INVESTIGATED TRIBUNAL OR STATUS AGENCY INVOLVED

NONE

Doc. No. ,lb ; Page No. Book No. VIII ; ATTY. E •h . I LARBAL Series of 2021 NOTARY P :LI FOR MAKATI CItY

UNTil. JUNE 30. 202. er SC En Banc R*WItiOn dad 000MMI APPOINTMENTNO.: MBS lB ROLL NO.: 33152

iSP NO.: 06547fLifetime/PPLM PTR No.: 8535331/01062021/Mkt1

156 H.V. Oda Costa St., Mak4 City

C O V E R S H E E T


1 5 2 6 6 1








Form Type Department requiring the report

Secondary License Type, If

Applicable

M S R D Not Applicable

Certification of Independent Director =

Mr. Peter S. Dee C O M P A N Y I N F O R M A T I O N


[email protected] 02-88936060 0968-5451452


750 as of 04/30/2021 2nd Tuesday of June December 31




Mr. Rudy Go [email protected] 02-8893-6060 0968-5451452


3/F Cityland Condominium 10 Tower II, 154 H.V. Dela Costa Street, Makati City

NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be

reported to the Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact

details of the new contact person designated.

2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s

records with the Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not

excuse the corporation from liability for its deficiencies.

CERTIFICATION OF INDEPENDENT DIRECTOR

I, PETER S. DEE, Filipino, of legal age and resident of 7 Banaba Circle, South Forbes Park, Makati City, after having been duly sworn to in accordance with the law do hereby declare that:

1. I am a nominee for independent director of City & Land Developers, Incorporated and have been its independent director since November 22, 2009;

2. I am affiliated with the following companies/organizations:

COMPANY POSITION PERIOD OF SERVICE

Alpolac, Inc. Director 1994 to present

China Banking Corporation Director 1977 to present

CBC Properties & Computer Center, Inc. Director / President 1984 to present

Cityland, Inc. Independent Director 12/2006 to present Chairman - Corporate Governance 07/27/18 to present Committee Chairman - Audit & Risk Committee 01/2007 to present

Cityplans, Incorporated Independent Director 1991 to present

Chairman - Compensation Committee 2002 to present

Chairman -Audit Committee Member - Nomination and Election Committee

Cityland Development Corporation Independent Director 12/1979 to present

Chairman - Audit & Risk Committee 2002 to present

GDSK Development Corporation Director 1990 to present

Hydee Management & Resources Director 1991 to present

Corporation

Kemwcrke, Inc. Director 1994 to present

Makati Curbs Holdings Corporation Director 2012 to present

Great Expectation Holdings, Inc. Director / Chairman I President 10/2012 to present

Commonwealth Foods, Inc. Director May 2013 to present

The Big D Holdings Corporation Director / Chairman / President 04/2013 to present

3. I possess all the qualifications and none of the disqualifications to serve as an Independent Director of City & Land Developers, Incorporated, as provided for in Section 38 of the Securities Regulation Code, and its Implementing Rules and Regulations and other SEC issuance;

4

4. 1 am not related to any director/officer/substantial shareholder of City & Land Developers, Incorporated other than the relationship provided under Rule 38.2.3 of the Securities Regulation Code;

5. To the best of my knowledge, I am not the subject of any pending criminal or administrative investigation or proceeding;

6. I am not an independent director in any government service/affiliated with a government agency or GOCC;

7. I shall faithfully and diligently comply with my duties and responsibilities as an independent director under the Securities Regulation Code and its Implementing Rules and Regulations Code of Corporate Governance and other SEC issuances; and

8. I shall inform the Corporate Secretary of City & Land Developers, Incorporated of any changes in the abovementioned information within five days from its occurrence.

APR 28 2021 at Done this day of

I Peter Affiant

SUBSCRIBED AND SWORN to before me this at , affiant personally appeared before me and exhibited to me his SSS ID with no. 03-1183011-8 and other competent evidence of identification.

APR

1027

Doc no. 3O7 Page no. 63

Book no. iJlJ

Series of 2021.

Name of Director/Officer/Substantial Shareholder Company Nature of Relationship

NONE NONE NONE

Offense - Charged/Investigated Tribunal or Agency Involved Status

NONE NONE NONE

A'.A .)ULARBAL

NOTA' PU8LIC FOR MAKAT1 CITY

UNTIL JUNE 30 I21 POINTMENT NO.: M-85 IBP ROLL NO. 33152

IBP NO.: 06547l1-lfetlme/PPLM PTR No.: 8535331ioi-06-2021/Ma

156 H.V. Dela Costa St.,, Makati City

*SGVFSM006891*

C O V E R S H E E Tfor

Audited Financial Statements


1 5 2 6 6 1









A A F S M S R D N / A



[email protected] 8-893-6060 0968-545-1452

No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day) 756

(as of December 31, 2020) 2nd Tuesday of June December 31






3/F Cityland Condominium 10 Tower II, 154 H. V. Dela Costa Street, Makati CityNOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission withinthirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.

2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records with the Commissionand/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies.

Rudy Go <[email protected]>

Your BIR AFS eSubmission uploads were received

[email protected] <[email protected]> Thu, Apr 22, 2021 at 9:07 PMTo: [email protected]: [email protected]

Hi CITY & LAND DEVELOPERS, INCORPORATED,

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EAFS000444840TCRTY122020-02.pdfEAFS000444840TCRTY122020-01.pdfEAFS000444840RPTTY122020.pdfEAFS000444840AFSTY122020.pdfEAFS000444840ITRTY122020.pdf

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Transaction Code: AFS-0-6D8JD8LG0QQW4V1XYQNRQWVRM06BF7GBC8 Submission Date/Time: Apr 22, 2021 09:07 PM Company TIN: 000-444-840

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TAA FMSD <[email protected]>

City & Land Developers, Incorporated_Amended SEC Form 17A forthe Year 2020_29April2021 2 messages

TAA FMSD <[email protected]> Thu, Apr 29, 2021 at 6:07 PMTo: ICTD Submission <[email protected]>Cc: MSRD COVID19 <[email protected]>, Officer Rudy Go <[email protected]>, FMSDCityland <[email protected]>

Dear Sir/Madam,

Good day!

We are sending herewith the Amended SEC Form 17A of City & Land Developers, Incorporated(the Company) for the Year 2020 which was initially submitted last April 23, 2021. TheAmendment was made to update the Period of Service of two of the Company's Directors reflectedon page 23 of the Annual Report. We have underlined the updated portion, for your reference. Other than this, no changes were made in the Annual Report.

Thank you very much and we hope that you will find everything in order.

-- Regards,Therese Raimunda R. Aquino-Anoos | Cityland Group of Companies

City & Land Developers, Incorporated_Amended SEC Form 17-A for the Year2020_29April2021.pdf 5263K

ICTD Submission <[email protected]> Thu, Apr 29, 2021 at 6:07 PMTo: [email protected]

Dear Customer,

SUCCESSFULLY ACCEPTED (subject to verification and review of the quality of the attached document)

Thank you.

SEC ICTD.

https://mail.google.com/mail/u/0?ui=2&ik=5256d26667&view=att&th=1791d18a7a52e541&attid=0.1&disp=attd&realattid=f_ko2q0n3p0&safe=1&zw

CTTY&LANDDEVELOPERS, INC,

STATEMENT OF MANAGEMN\I'T'S RESPONSISILITY FOR FINANCIAL STATEMENTS

The Management of City & Land Developers, Incorporated (the Conpany) is responsible for the preparation andfair presentatien of &e balance sheets as at December 31,2A2O and ?019. and the statements of inccme, statementsof comprehensive income, staternents of changes in equif arrd statements of cash flows for each of the three yearsin period ended December 31, 2020, and notes tq t}re fmancial statements, including a sumrrary of significantaccounting policies and the schedules attached therein, in accordance with Philippine Financial ReportingStandards, and for such interhal control as management determines is necessar5r to enable the preparation offinencial statements ttrat are free from material misstatement, whether due to fraud or srror.

Iu preparing the financial statements, management is responsible for assessing the Company's ability to continueas a gaing concert'l disclcsing, as applicable mafi€rs related to gomg concern and using the going coacern hsis ofaccountilrg, unlws rnanagement either intends to liquidate the Company or to cease operations, or has no realisticaltemative but to do so.

The Board of Directors is responsible for overseeing the Company's financial reporting proc€ss.

?heBoard of Dirmtors reviews and approvs the financial statements including the schedules attached tlrereiq andsubmits the same to tLe stockholders.

SyCip Velayo & Co., the independent auditors appointed by the stockholders, has audited the fmancialof the Company itr accordance with Philippine Standards on Audhing and in its report to the

has exprssed its opinion on the fairness of presentation upon completion of such audit

DB. ANDRE1Y I, LIUSONof

GOH{}C/ Chief Executive Of,fi cer

R.IJDYGOSaniorVice Presidort I Chief Financial OfficertSigned this 24h davoflMarch 2021. I

tlAR 3 1 ?021i raste crrYSUBSCRIBED AND S'WORN to before me this day of__affrant(s) exhibiting ta me fheir Social SecuritySystem Numbers, a.r follows :

,q?-rgTilt

t.

NameDr. Andreur I. LiusoilJosefe. GohscRu&Go

Docl.{o.PageNo.BookNo.Series of202

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lilf ir.r:.i I'iO.: 513'15

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3/F CTTYLAND CoNDoMINIUM 1 0 ToWER I, 1 56 H.V. DELA CoSTA STREEI MAKATI CITY 1 226

P.0. BOX 5000 MAKATI 1290 TEL.#:893-60-60 FM#:892'86-56 ww.cityland.net

*SGVFSM006891*

INDEPENDENT AUDITOR’S REPORT

The Stockholders and the Board of DirectorsCity & Land Developers, Incorporated3rd Floor Cityland Condominium 10, Tower I156 H.V. dela Costa Street, Makati City

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of City & Land Developers, Incorporated (the Company), whichcomprise the statements of financial position as at December 31, 2020 and 2019, and the statements ofincome, statements of comprehensive income, statements of changes in equity and statements of cashflows for each of the three years in the period ended December 31, 2020, and notes to the financialstatements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financialposition of the Company as at December 31, 2020 and 2019, and its financial performance and its cashflows for each of the three years in the period ended December 31, 2020 in accordance with PhilippineFinancial Reporting Standards (PFRSs).

Basis for Opinion

We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Financial Statements section of our report. We are independent of the Company in accordancewith the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics) together with theethical requirements that are relevant to our audit of the financial statements in the Philippines, and wehave fulfilled our other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in ouraudit of the financial statements of the current period. These matters were addressed in the context of ouraudit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on these matters. For each matter below, our description of how our audit addressed thematter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of theFinancial Statements section of our report, including in relation to these matters. Accordingly, our auditincluded the performance of procedures designed to respond to our assessment of the risks of materialmisstatement of the financial statements. The results of our audit procedures, including the procedures

SyCip Gorres Velayo & Co.6760 Ayala Avenue1226 Makati CityPhilippines

Tel: (632) 8891 0307Fax: (632) 8819 0872ey.com/ph

BOA/PRC Reg. No. 0001, October 4, 2018, valid until August 24, 2021SEC Accreditation No. 0012-FR-5 (Group A),

November 6, 2018, valid until November 5, 2021

A member firm of Ernst & Young Global Limited

*SGVFSM006891*

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performed to address the matter below, provide the basis for our audit opinion on the accompanyingfinancial statements.

Real Estate Revenue Recognition

The Company’s revenue recognition process, policies and procedures are significant to our audit becausethese involve application of significant judgment and estimation in the following areas: (1) assessment ofthe probability that the entity will collect the consideration from the buyer; (2) determination of thetransaction price; (3) application of the input method as the measure of progress in determining real estaterevenue; (4) determination of the actual costs incurred as cost of sales; and (5) recognition of cost toobtain a contract.

In evaluating whether collectability of the amount of consideration is probable, the Company considersthe significance of the buyer’s initial payments (buyer’s equity) in relation to the total contract price.Collectability is also assessed by considering factors such as past history with buyers, age of residentialand office development receivables and pricing of the property. Management regularly evaluates thehistorical sales cancellations and back-outs, after considering the impact of coronavirus pandemic, if itwould still support its current threshold of buyer’s equity before commencing revenue recognition.In determining the transaction price, the Company considers the selling price of the real estate propertyand other fees and charges collected from the buyers that are not held on behalf of other parties.

In measuring the progress of its performance obligation over time, the Company uses input method.Under this method, progress is measured based on actual costs incurred on materials, labor, and actualoverhead relative to the total estimated development costs of the real estate project. The Company usesthe cost accumulated by the accounting department to determine the actual costs incurred. The estimationof the total costs of the real estate project requires technical inputs by project engineers.

In determining the actual costs incurred to be recognized as cost of sales, the Company estimates costsincurred on materials, labor and overhead which have not yet been billed by the contractor.

The Company identifies sales commission after contract inception as the cost of obtaining the contract.For contracts which qualified for revenue recognition, the Company capitalizes the total sales commissiondue to sales agent as cost to obtain contract and recognizes the related commission payable. TheCompany uses percentage of completion (POC) method in amortizing sales commission consistent withthe Company’s revenue recognition policy.

The disclosures related to the real estate revenue are included in Notes 2, 3 and 5 to the financialstatements.

Audit Response

We obtained an understanding of the Company’s revenue recognition process.

For the buyer’s equity, we evaluated management’s basis of the buyer’s equity by comparing this to thehistorical analysis of sales cancellations from buyers with accumulated payments above the collectionthreshold. We also considered the impact of the coronavirus pandemic to the level of cancellations duringthe year. We traced the analysis to supporting documents, such as history of payments, contracts to sell ofsold units, and schedule of forfeited units.


*SGVFSM006891*

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For the determination of the transaction price, we obtained an understanding of the nature of other feescharged to the buyers. For selected contracts, we agreed the amounts excluded from the transaction priceagainst the expected amounts required to be remitted to the government based on existing tax rules andregulations (e.g., documentary stamp taxes, transfer taxes and real property taxes).

For the application of the input method in determining real estate revenue and for determining cost ofsales, we obtained an understanding of the Company’s processes for determining the POC, including thecost accumulation process, and for determining and updating of total estimated costs, and performed testsof the relevant controls on these processes. We assessed the competence and objectivity of the projectengineers by reference to their qualifications, experience and reporting responsibilities. For selectedprojects, we traced costs accumulated, including those incurred but not yet billed costs, to the supportingdocuments, such as accomplishment reports, contracts, and progress billings. We visited selected projectsites and made relevant inquiries, including inquiries on how the coronavirus pandemic affected the POCduring the period, with project engineers. We performed test computation of the percentage of completioncalculation of management. For selected projects, we obtained the approved total estimated costs and anyrevisions thereto and the supporting details, such as accomplishment and estimated development costreports. We likewise performed inquiries with the project engineers for the revisions.

For the recognition of cost to obtain a contract, we obtained an understanding of the sales commissionprocess. For selected contracts, we agreed the basis for calculating the sales commission capitalized andportion recognized in profit or loss, particularly (a) the percentage of commission due against contractswith sales agents, (b) the total commissionable amount (e.g., net contract price) against the relatedcontract to sell, and, (c) the POC against the POC used in recognizing the related revenue from real estatesales.

Other Information

Management is responsible for the other information. The other information comprises the informationincluded in the SEC Form 20-IS (Definitive Information Statement) and SEC Form 17-A or AnnualReport for the year ended December 31, 2020, but does not include the financial statements and ourauditor’s report thereon. The SEC Form 20-IS (Definitive Information Statement) and SEC Form 17-Aor Annual Report for the year ended December 31, 2020 are expected to be made available to us after thedate of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we will not express anyform of assurance conclusion thereon.

In connection with our audits of the financial statements, our responsibility is to read the otherinformation identified above when it becomes available and, in doing so, consider whether the otherinformation is materially inconsistent with the financial statements or our knowledge obtained in theaudits, or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements inaccordance with PFRSs, and for such internal control as management determines is necessary to enablethe preparation of financial statements that are free from material misstatement, whether due to fraud orerror.


*SGVFSM006891*

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In preparing the financial statements, management is responsible for assessing the Company’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with PSAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraudor error, design and perform audit procedures responsive to those risks, and obtain audit evidence thatis sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Company to cease to continueas a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation.


*SGVFSM006891*

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We communicate with those charged with governance regarding, among other matters, the planned scopeand timing of the audit and significant audit findings, including any significant deficiencies in internalcontrol that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.

From the matters communicated with those charged with governance, we determine those matters thatwere of most significance in the audit of the financial statements of the current period and are therefore thekey audit matters. We describe these matters in our auditor’s report unless law or regulation precludespublic disclosure about the matter or when, in extremely rare circumstances, we determine that a mattershould not be communicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010

Our audits were conducted for the purpose of forming an opinion on the basic financial statements takenas a whole. The supplementary information required under Revenue Regulations No. 15-2010 in Note 28to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and isnot a required part of the basic financial statements. Such information is the responsibility of themanagement of City & Land Developers, Incorporated. The information has been subjected to theauditing procedures applied in our audit of the basic financial statements. In our opinion, the informationis fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

The engagement partner on the audit resulting in this independent auditor’s report is Aileen L. Saringan.

SYCIP GORRES VELAYO & CO.

Aileen L. SaringanPartnerCPA Certificate No. 72557SEC Accreditation No. 0096-AR-5 (Group A), July 25, 2019, valid until July 24, 2022Tax Identification No. 102-089-397BIR Accreditation No. 08-001998-058-2020, December 3, 2020, valid until December 2, 2023PTR No. 8534360, January 4, 2021, Makati City

March 24, 2021


*SGVFSM006891*

CITY & LAND DEVELOPERS, INCORPORATEDSTATEMENTS OF FINANCIAL POSITION

December 312020 2019

ASSETSCurrent AssetsCash and cash equivalents (Note 4) P=178,309,538 P=237,660,249Short-term investments (Note 4) 58,500,000 10,000,000Current portion of:

Installment contracts receivable (Note 5) 1,765,893 707,509Contract assets (Note 5) 45,757,086 62,223,947Cost to obtain contracts (Note 5) 3,598,890 3,885,978Other receivables (Note 6) 2,216,653 1,800,645

Real estate properties for sale (Note 8) 1,138,427,667 1,005,860,529Other current assets (Note 10) 4,298,601 3,394,837Total Current Assets 1,432,874,328 1,325,533,694Noncurrent AssetsContract assets - net of current portion (Note 5) 362,442,313 405,852,058Cost to obtain contract - net of current portion (Note 5) 2,931,886 4,308,635Other receivables - net of current portion (Note 6) 1,406,160 1,315,259Financial assets at fair value through

other comprehensive income (FVOCI) (Note 7) 494,298 487,912Real estate properties held for future development (Note 8) 494,356,932 491,809,557Investment properties (Note 9) 181,139,332 181,139,332Deferred income tax assets - net (Note 20) – 8,192,586Other noncurrent assets (Note 10) 28,489,712 28,535,350Total Noncurrent Assets 1,071,260,633 1,121,640,689TOTAL ASSETS P=2,504,134,961 P=2,447,174,383

LIABILITIES AND EQUITYCurrent LiabilitiesAccounts payable and accrued expenses (Note 11) P=130,171,009 P=118,543,148Contract liabilities - current portion (Note 5) 74,415,683 68,011,239Income tax payable 786,568 7,801,710Total Current Liabilities 205,373,260 194,356,097Noncurrent LiabilitiesAccounts payable and accrued expenses - noncurrent portion (Note 11) 12,826,411 17,834,209Contract liabilities - net of current portion (Note 5) 50,931,630 63,993,337Retirement benefits liability - net (Note 19) 3,949,772 8,314,472Deferred income tax liabilities - net (Note 20) 2,665,373 –Total Noncurrent Liabilities 70,373,186 90,142,018Total Liabilities 275,746,446 284,498,115EquityCapital stock - P=1.00 par value (Notes 13 and 23)

Authorized - 1,435,000,000 sharesIssued - 1,431,785,284 shares held by 756 and 762 equity holders in

2020 and 2019, respectively 1,431,785,284 1,431,785,284Additional paid-in capital 105,136 105,136Unrealized fair value changes on financial assets at FVOCI (Note 7) 398,463 392,077Accumulated re-measurement loss on defined benefit plans - net of deferred

income tax effect (Note 19) (6,337,668) (9,298,273)Retained earnings 802,437,300 739,692,044Total Equity 2,228,388,515 2,162,676,268TOTAL LIABILITIES AND EQUITY P=2,504,134,961 P=2,447,174,383

See accompanying Notes to Financial Statements.

*SGVFSM006891*

CITY & LAND DEVELOPERS, INCORPORATEDSTATEMENTS OF INCOME

Years Ended December 312020 2019 2018

REVENUESales of real estate properties (Note 5) P=253,550,492 P=513,552,433 P=414,509,830Financial income (Note 16) 77,548,066 99,451,660 84,046,822Rent income (Note 9) 5,331,033 6,634,429 3,764,560Other income - net (Note 18) 18,037,980 9,790,828 6,486,154

354,467,571 629,429,350 508,807,366

COST AND EXPENSESCost of real estate sales (Note 8) 152,154,183 291,124,974 221,180,698Operating expenses (Note 14) 65,449,700 100,266,454 87,238,654Financial expenses (Note 17) 203,550 575,900 400,329

217,807,433 391,967,328 308,819,681

INCOME BEFORE INCOME TAX 136,660,138 237,462,022 199,987,685

PROVISION FOR INCOME TAX (Note 20) 32,106,756 61,754,897 50,284,869

NET INCOME P=104,553,382 P=175,707,125 P=149,702,816

BASIC/DILUTED EARNINGS PER SHARE(Note 24) P=0.07 P=0.12 P=0.10


*SGVFSM006891*

CITY & LAND DEVELOPERS, INCORPORATEDSTATEMENTS OF COMPREHENSIVE INCOME


NET INCOME P=104,553,382 P=175,707,125 P=149,702,816

OTHER COMPREHENSIVE INCOME (LOSS)Not to be reclassified to profit or loss in subsequent

periods: Changes in fair value of financial assets at fair value

through other comprehensive income (Note 7) 6,386 (429,158) (113,509)Remeasurement gain (loss) on defined benefit plan

- net of income tax effect (Note 19) 2,960,605 (3,861,852) 1,142,1052,966,991 (4,291,010) 1,028,596

TOTAL COMPREHENSIVE INCOME P=107,520,373 P=171,416,115 P=150,731,412


*SGVFSM006891*

CITY & LAND DEVELOPERS, INCORPORATEDSTATEMENTS OF CHANGES IN EQUITYFOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018

Capital Stock Additional Paid-in

Unrealized Fair ValueChanges of Financial

Assets at FVOCI

AccumulatedRe-measurement on

Defined Benefit Plan-Net of Deferred

Income Tax Effect Retained Earnings(Note 13) Capital (Note 7) (Note 19) (Note 13) Total

BALANCES AT JANUARY 1, 2018 P=1,298,672,140 P=105,136 P=934,744 (P=6,578,526) P=642,439,278 P=1,935,572,772Net income – – – – 149,702,816 149,702,816Other comprehensive income (loss) – – (113,509) 1,142,105 – 1,028,596Total comprehensive income (loss) – – (113,509) 1,142,105 149,702,816 150,731,412Stock dividends - 5% 64,933,238 – – – (64,933,238) –Fractional shares of stock dividends – – – – (368) (368)Cash dividends - P=0.0294 per share – – – – (38,180,954) (38,180,954)BALANCES AT DECEMBER 31, 2018 P=1,363,605,378 P=105,136 P=821,235 (P=5,436,421) P=689,027,534 P=2,048,122,862

BALANCES AT DECEMBER 31, 2018 P=1,363,605,378 P=105,136 P=821,235 (P=5,436,421) P=689,027,534 P=2,048,122,862Net income – – – – 175,707,125 175,707,125Other comprehensive loss – – (429,158) (3,861,852) – (4,291,010)Total comprehensive income (loss) – – (429,158) (3,861,852) 175,707,125 171,416,115Stock dividends - 5% 68,179,906 – – – (68,179,906) –Fractional shares of stock dividends – – – – (363) (363)Cash dividends - P=0.0417 per share – – – – (56,862,346) (56,862,346)BALANCES AT DECEMBER 31, 2019 P=1,431,785,284 P=105,136 P=392,077 (P=9,298,273) P=739,692,044 P=2,162,676,268

BALANCES AT DECEMBER 31, 2019 P=1,431,785,284 P=105,136 P=392,077 (P=9,298,273) P=739,692,044 P=2,162,676,268Net income – – – – 104,553,382 104,553,382Other comprehensive income – – 6,386 2,960,605 – 2,966,991Total comprehensive income – – 6,386 2,960,605 104,553,382 107,520,373Cash dividends - P=0.0292 per share – – – – (41,808,126) (41,808,126)BALANCES AT DECEMBER 31, 2020 P=1,431,785,284 P=105,136 P=398,463 (P=6,337,668) P=802,437,300 P=2,228,388,515


*SGVFSM006891*

CITY & LAND DEVELOPERS, INCORPORATEDSTATEMENTS OF CASH FLOWS


CASH FLOWS FROM OPERATING ACTIVITIESIncome before income tax P=136,660,138 P=237,462,022 P=199,987,685Adjustments for:

Interest income (Note 16) (77,537,701) (99,436,136) (84,031,766)Retirement benefits cost (Note 19) 2,445,589 1,555,784 1,294,641Dividend income (Note 16) (10,365) (15,524) (15,056)Gain on sale of shares of stock (Notes 7 and 18) – (481,866) –

Operating income before working capital changes 61,557,661 139,084,280 117,235,504Decrease (increase) in:

Installment contracts receivable (1,058,384) 886,133 161,411,325Contract assets 59,876,606 (109,581,709) (358,494,296)Other receivables (770,552) 3,205,817 1,175,132Cost to obtain contracts 1,663,837 2,353,146 (2,268,873)Real estate properties for sale (132,567,138) (234,170,810) 7,802,569

Real estate properties held for future development(Note 8) (2,547,375) (2,635,904) (496,105,209)

Other assets (858,128) 2,411,402 765,823Increase (decrease) in:

Accounts payable and accrued expenses 6,200,569 65,800,491 (38,098,848)Contract liabilities (6,657,263) (30,382,752) 162,387,328

Cash generated used in operations (15,160,167) (163,029,906) (444,189,545)Interest received 77,801,344 103,206,391 83,083,389Income taxes paid, including creditable

and final withholding taxes (29,532,766) (59,404,775) (44,956,067)Contributions to the plan (Note 19) (2,580,855) (2,402,063) (1,508,101)Net cash flows from (used in) operating activities 30,527,556 (121,630,353) (407,570,324)CASH FLOWS FROM INVESTING ACTIVITIESProceeds from matured (purchase of) short-term

investments (Note 4) (48,500,000) 526,000,000 306,500,000Dividends received 10,365 15,524 15,056Proceeds from sale of marketable securities – 655,943 –Net cash flows from (used in) investing activities (48,489,635) 526,671,467 306,515,056CASH FLOWS FROM FINANCING ACTIVITIESDividends paid (Notes 11 and 13) (41,388,632) (56,889,787) (37,851,072)Proceeds from issuance of short-term notes (Note 12) – 796,950,000 1,206,350,000Payments of short-term notes (Note 12) – (990,750,000) (1,164,850,000)Interest paid - net of amounts capitalized (Note 12) – (981,278) –Net cash flows from (used in) financing activities (41,388,632) (251,671,065) 3,648,928NET INCREASE (DECREASE) IN CASH

AND CASH EQUIVALENTS (59,350,711) 153,370,049 (97,406,340)CASH AND CASH EQUIVALENTS

AT BEGINNING OF YEAR (Note 4) 237,660,249 84,290,200 181,696,540CASH AND CASH EQUIVALENTS

AT END OF YEAR (Note 4) P=178,309,538 P=237,660,249 P=84,290,200

See accompanying Notes to Financial Statements

*SGVFSM006891*

CITY & LAND DEVELOPERS, INCORPORATEDNOTES TO FINANCIAL STATEMENTS

1. Corporate Information

City & Land Developers, Incorporated (the “Company”) was incorporated in the Philippines onJune 28, 1988. Its primary purpose is to establish an effective institutional medium for acquiring anddeveloping suitable land sites for residential, office, commercial, institutional and industrial usesprimarily, but not exclusively, in accordance with the subdivision, condominium, and cooperativeconcepts of land-utilization and land-ownership. The Company’s registered office and principal placeof business is 3rd Floor Cityland Condominium 10 Tower I, 156 H. V. de la Costa Street, Makati City.

The Company is 49.73%-owned by Cityland Development Corporation (CDC), a publicly listedcompany incorporated and domiciled in the Philippines. The Company’s ultimate parent is Cityland,Inc. (CI), a company incorporated and domiciled in the Philippines, which prepares consolidatedfinancial statements and that of its subsidiaries.

The financial statements of the Company as at December 31, 2020 and 2019 and for each of the threeyears in the period ended December 31, 2020 were authorized for issuance by the Board of Directors(BOD) on March 24, 2021.

2. Summary of Significant Accounting and Financial Reporting Policies

Basis of PreparationThe financial statements of the Company have been prepared using the historical cost basis,except for financial assets measured at fair value through other comprehensive income (FVOCI) thathave been measured at fair values. The financial statements are presented in Philippine peso (Peso),which is the Company’s functional currency, and rounded to the nearest Peso except when otherwiseindicated.

The financial statements have been prepared under the going concern assumption. The Companybelieves that its businesses would remain relevant despite challenges posed by the COVID-19pandemic. Despite the adverse impact of the COVID-19 pandemic on short-term business results,long-term prospects remain attractive.

Statement of ComplianceThe Company’s financial statements have been prepared in accordance with Philippine FinancialReporting Standards (PFRSs) which include the availment of reliefs granted by the SEC underMemorandum Circular No. 14, Series of 2018 and Memorandum Circular No. 3, Series of 2019, todefer the implementation of the following accounting pronouncements until December 31, 2020. Theseaccounting pronouncements address the issues of PFRS 15, Revenue from Contracts with Customers,affecting the real estate industry.

Deferral of the following provisions of Philippine Interpretations Committee (PIC) Q&A 2018-12,PFRS 15 Implementation Issues Affecting the Real Estate Industry

a. Assessing if the transaction price includes a significant financing component (as amended by PICQ&A 2020-04);

b. Treatment of land in the determination of percentage-of-completion (POC);c. Treatment of uninstalled materials in the determination of POC (as amended by PIC Q&A

2020-02); and,d. Accounting for Common Usage Service Area (CUSA) charges.

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Deferral of the adoption of PIC Q&A 2018-14: Accounting for Cancellation of Real Estate Sales(as amended by PIC Q&A 2020-05)

The Company also availed of the relief provided by SEC Memorandum Circular No. 4, Series of2020, deferring the adoption of IFRIC Agenda Decision on Over Time Transfers of ConstructedGoods under PAS 23, Borrowing Cost, (the IFRIC Agenda Decision on Borrowing Cost) untilDecember 31, 2020.

In December 2020, the SEC issued Memorandum Circular No. 34, Series of 2020, allowing thefurther deferral of the adoption of provisions (a) and (b) above of PIC Q&A 2018-12 and the IFRICAgenda Decision on Borrowing Cost, for another other three (3) years or until December 31, 2023.

Changes in Accounting PoliciesThe accounting policies adopted are consistent with those of the previous financial year, except that theCompany has adopted the following new accounting pronouncements starting January 1, 2020:

Amendments to PFRS 3, Business Combinations, Definition of a Business

The amendments to PFRS 3 clarifies that to be considered a business, an integrated set of activitiesand assets must include, at a minimum, an input and a substantive process that together significantlycontribute to the ability to create output. Furthermore, it clarifies that a business can exist withoutincluding all of the inputs and processes needed to create outputs. In 2020, the Company did notenter into any business combination. These amendments may impact future periods should theCompany enter into such transaction.

Amendments to PFRS 7, Financial Instruments: Disclosures and PFRS 9, Financial Instruments,Interest Rate Benchmark Reform

The amendments to PFRS 9 provide a number of reliefs, which apply to all hedging relationshipsthat are directly affected by the interest rate benchmark reform. A hedging relationship is affectedif the reform gives rise to uncertainties about the timing and or amount of benchmark-based cashflows of the hedged item or the hedging instrument. These amendments will not affect the Companysince it does not have any hedge transaction.

Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies,Changes in Accounting Estimates and Errors, Definition of Material

The amendments provide a new definition of material that states “information is material ifomitting, misstating or obscuring it could reasonably be expected to influence decisions that theprimary users of general purpose financial statements make on the basis of those financialstatements, which provide financial information about a specific reporting entity.”

The amendments clarify that materiality will depend on the nature or magnitude of information,either individually or in combination with other information, in the context of the financialstatements. A misstatement of information is material if it could reasonably be expected toinfluence decisions made by the primary users. These amendments had no impact on the financialstatements of, nor is there expected to be any future impact to the Company.

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Conceptual Framework for Financial Reporting issued on March 29, 2018

The Conceptual Framework is not a standard, and none of the concepts contained therein overridethe concepts or requirements in any standard. The purpose of the Conceptual Framework is toassist the standard-setters in developing standards, to help preparers develop consistent accountingpolicies where there is no applicable standard in place and to assist all parties to understand andinterpret the standards.

The revised Conceptual Framework includes new concepts, provides updated definitions andrecognition criteria for assets and liabilities and clarifies some important concepts. The revisionsmade to Conceptual Framework had no significant impact on the Company’s financial statements.

Amendments to PFRS 16, COVID-19-related Rent Concessions

The amendments provide relief to lessees from applying the PFRS 16 requirement on leasemodifications to rent concessions arising as a direct consequence of the COVID-19 pandemic. Alessee may elect not to assess whether a rent concession from a lessor is a lease modification if itmeets all of the following criteria:

The rent concession is a direct consequence of COVID-19; The change in lease payments results in a revised lease consideration that is substantially the

same as, or less than, the lease consideration immediately preceding the change; Any reduction in lease payments affects only payments originally due on or before

June 30, 2021; and There is no substantive change to other terms and conditions of the lease.

A lessee that applies this practical expedient will account for any change in lease payments resultingfrom the COVID-19 related rent concession in the same way it would account for a change that isnot a lease modification, i.e., as a variable lease payment.

The amendments are effective for annual reporting periods beginning on or after June 1, 2020.Early adoption is permitted.

Company as LesseeThe adoption of these amendments has no significant impact on the financial statements for theyear ended December 31, 2020.

Company as LessorModifications to operating lease terms and conditions on contracts wherein the Company is thelessor were accounted as a new lease from the effective date of the modification, considering anyprepaid or accrued lease payments relating to the original lease as part of the lease payments forthe new lease.

Deferment of PIC Q&A No. 2018-12 and IFRS Interpretations Committee (IFRIC) AgendaDecision on Over Time Transfer of Constructed Goods [PAS 23 - Borrowing Cost] For Real EstateIndustry PIC Q&A No. 2018-12On February 14, 2018, the Philippines Interpretation Committee (PIC) issued PIC Q&A 2018-12(PIC Q&A) which provides guidance on some implementation issues of PFRS 15 affecting realestate industry. On October 29, 2018 and February 8, 2019, the Philippine Securities and ExchangeCommission (SEC) issued SEC Memorandum Circular No. 14 Series of 2018 and SECMemorandum Circular No. 3 Series of 2019, respectively, providing relief to the real estate industry

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by deferring the application of the following provisions of the above PIC Q&A for a period of3 years:

a. Exclusion of land and uninstalled materials in the determination of percentage of completion(POC) discussed in PIC Q&A No. 2018-12-E

b. Accounting for significant financing component discussed in PIC Q&A No. 2018-12-Dc. Accounting to Common Usage Service Area (CUSA) Charges discussed in PIC Q&A

No. 2018-12-H

Under the same SEC Memorandum Circular No. 3, Series of 2019, the adoption of PIC Q&ANo. 2018-14: PFRS 15 - Accounting for Cancellation of Real Estate Sales was also deferred.

Except for the CUSA charges discussed under PIC Q&A No. 2018-12-H which applies to leasingtransactions, the above deferral will only be applicable for real estate sales transactions.

Effective January 1, 2021, real estate companies will adopt PIC Q&A No. 2018-12 andPIC Q&A No. 2018-14 and any subsequent amendments thereof retrospectively or as the SEC willlater prescribe.

However, the Commission en banc, in its meeting held on December 15, 2020, decided to providerelief to the real estate industry by deferring the application of the provisions of the PIC Q&ANo. 2018-12 with respect to the accounting for significant financing component and the exclusionof land in the calculation of POC for another period of three years or until 2023. The deferral is togive more than enough time to real estate industry to further evaluate and explore options to resolvethe remaining implementing issues and help the industry to mitigate the impact of COVID-19 crisis.

The SEC Memorandum Circulars also provided the mandatory disclosure requirements should anentity decide to avail of any relief. Disclosures should include:

a. The accounting policies appliedb. Discussion of the deferral of the subject implementation issues in the PIC Q&Ac. Qualitative discussion of the impact in the financial statements had the concerned application

guideline in the PIC Q&A been adopted.d. Should any of the deferral options result into a change in accounting policy (e.g., when an

entity excludes land and/or uninstalled materials in the POC calculation under the previousstandard but opted to include such components under the relief provided by the circular), suchaccounting change will have to be accounted for under PAS 8, i.e., retrospectively, togetherwith the corresponding required quantitative disclosures.

The Company availed of the deferral of adoption of the above specific provisions of PIC Q&A,specifically on PIC Q&A No. 2018-12-D Accounting for significant financing component. Hadthis provision been adopted, it would have an impact in the financial statements as to the mismatchbetween the POC of the real estate projects and right to consideration based on the schedule ofpayments explicit in the contract to sell which constitutes a significant financing component.Interest income would have been recognized for contract assets and interest expense for contractliabilities using effective interest rate method and this would have impacted retained earnings as atJanuary 1, 2021 and the revenue from real estate sales in 2021. Currently, any significant financingcomponent arising from the mismatch discussed above is not considered for revenue recognitionpurposes.

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Since the Company’s current practice is in line with the PIC Q&A No. 2018-12-E,PIC Q&A No. 2018-12-H and PIC Q&A No. 2018-14, the Company does not expect significantimpact on its financial statements upon adoption of these amendments.

IFRS Interpretations Committee (IFRIC) Agenda Decision on Over Time Transfer of ConstructedGoods [PAS 23 - Borrowing Cost] For Real Estate IndustryIn March 2019, IFRIC published an Agenda Decision on whether borrowing costs can becapitalized on real estate inventories that are under construction and for which the related revenueis/will be recognized over time under par. 35(c) of IFRS 15. IFRIC concluded that borrowing costscannot be capitalized for such real estate inventories as they do not meet the definition of aqualifying asset under IAS 23 considering that these inventories are ready for their intended sale intheir current condition.

The IFRIC agenda decision would change the Company’s current practice of capitalizingborrowing costs on real estate projects with pre-selling activities.

On February 11, 2020, the Philippine SEC issued Memorandum Circular No. 4, Series of 2020,providing relief to the Real Estate Industry by deferring the mandatory implementation of the aboveIFRIC Agenda Decision until December 31, 2020. Effective January 1, 2021, the Real EstateIndustry will adopt the IFRIC agenda decision and any subsequent amendments theretoretrospectively or as the SEC will later prescribe. A real estate company may opt not to avail ofthe deferral and instead comply in full with the requirements of the IFRIC agenda decision.

On December 15, 2020, the Commission en banc decided to provide relief to the real estate industryby deferring the application of the provisions of the IFRIC Agenda Decision on Over TimeTransfers of Constructed Goods under PAS 23, Borrowing Cost for another period of three yearsor until 2023.

For real estate companies that avail of the deferral, the SEC requires disclosure in the Notes to theFinancial Statements of the accounting policies applied, a discussion of the deferral of the subjectimplementation issues, and a qualitative discussion of the impact in the financial statements hadthe IFRIC agenda decision been adopted.

The Company opted to avail of the relief as provided by the SEC. Had the Company adopted theIFRIC agenda decision, borrowing costs capitalized to real estate inventories related to projectswith pre-selling activities should have been expensed out in the period incurred.

This adjustment should have been applied retrospectively and would have resulted to restatementof prior year financial statements. A restatement would have impacted interest expense, cost ofreal estate sales, provision for deferred income tax, real estate properties for sale, deferred incometax liability and opening balance of retained earnings.

Current versus Noncurrent ClassificationThe Company presents assets and liabilities in the statements of financial position based oncurrent/noncurrent classification.

An asset is current when it is: Expected to be realized or intended to be sold or consumed in normal operating cycle Held primarily for the purpose of trading Expected to be realized within 12 months after the reporting period, or

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Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for atleast 12 months after the reporting period.

All other assets are classified as noncurrent.

A liability is current when: It is expected to be settled in normal operating cycle It is held primarily for the purpose of trading It is due to be settled within 12 months after the reporting period, or There is no unconditional right to defer the settlement of the liability for at least 12 months after

the reporting period.

The Company classifies all other liabilities as noncurrent.

Deferred income tax assets and liabilities are classified as noncurrent assets and liabilities, respectively.

Cash and Cash EquivalentsCash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investmentsthat are readily convertible to known amounts of cash with original maturities of three months or lessfrom dates of acquisition, and are subject to an insignificant risk of change in value.

Short-term InvestmentsShort-term investments are investments with maturities of more than three months but not exceedingone year from dates of acquisition.

Fair Value MeasurementFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The fair value measurement is basedon the presumption that the transaction to sell the asset or transfer the liability takes place either:

in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants woulduse when pricing the asset or liability, assuming that market participants act in their economic bestinterest.

A fair value measurement of a non-financial asset takes into account a market participant's ability togenerate economic benefits by using the asset in its highest and best use or by selling it to anothermarket participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for whichsufficient data are available to measure fair value, maximizing the use of relevant observable inputsand minimizing the use of unobservable inputs.

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All assets and liabilities for which fair value is measured or disclosed in the financial statements arecategorized within the fair value hierarchy, described as follows, based on the lowest level input that issignificant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value

measurement is directly or indirectly observable Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value

measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, theCompany determines whether transfers have occurred between Levels in the hierarchy byre-assessing categorization (based on the lowest level input that is significant to the fair valuemeasurement as a whole) at the end of each reporting period.

Financial InstrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity.

a. Financial assetsInitial recognition and measurementFinancial assets are classified, at initial recognition, and subsequently measured at amortized cost, fairvalue through other comprehensive income (FVOCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractualcash flow characteristics and the Company’s business model for managing them. The Company initiallymeasures a financial asset at its fair value plus, in the case of a financial asset not at fair value throughprofit or loss, transaction costs. Installment contract receivables and contract assets are measured atthe transaction price determined under PFRS 15.

In order for a financial asset to be classified and measured at amortized cost or fair value through OCI,it needs to give rise to cash flows that are SPPI on the principal amount outstanding. This assessmentis referred to as the SPPI test and is performed at an instrument level.

The Company’s business model for managing financial assets refers to how it manages its financialassets in order to generate cash flows. The business model determines whether cash flows will resultfrom collecting contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established byregulation or convention in the market place (regular way trades) are recognized on the trade date, i.e.,the date that the Company commits to purchase or sell the asset.

Subsequent measurementFor purposes of subsequent measurement, financial assets are classified in four categories:

Financial assets at amortized cost (debt instruments) Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt

instruments) Financial assets designated at fair value through OCI with no recycling of cumulative gains and

losses upon derecognition (equity instruments) Financial assets at fair value through profit or loss

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Financial assets at amortized cost (debt instruments)This category is the most relevant to the Company. The Company measures financial assets atamortized cost if both of the following conditions are met: (a) the financial asset is held within abusiness model with the objective to hold financial assets in order to collect contractual cash flows and(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost are subsequently measured using the effective interest (EIR) methodand are subject to impairment. Gains and losses are recognized in profit or loss when the asset isderecognized, modified or impaired.

The Company’s financial assets at amortized cost includes cash and cash equivalents, short-terminvestments, installment contracts receivable, other receivables and deposits under “Other noncurrentassets”.

Financial assets at FVOCI (debt instruments)The Company measures debt instruments at FVOCI if both of the following conditions are met:

(a) The financial asset is held within a business model with the objective of both holding to collectcontractual cash flows; and

(b) The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.

For debt instruments at FVOCI, interest income, foreign exchange revaluation and impairment lossesor reversals are recognized in the statement of income and computed in the same manner as for financialassets measured at amortized cost. The remaining fair value changes are recognized in OCI. Uponderecognition, the cumulative fair value change recognized in OCI is recycled to profit or loss.

The Company has no debt instruments at FVOCI.

Financial assets designated at FVOCI (equity instruments)Upon initial recognition, the Company can elect to classify irrevocably its equity investments asfinancial assets at FVOCI when they meet the definition of equity under PAS 32, FinancialInstruments: Presentation and are not held for trading. The classification is determined on aninstrument-by-instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognizedas other income in the statement of income when the right of payment has been established, exceptwhen the Company benefits from such proceeds as a recovery of part of the cost of the financial asset,in which case, such gains are recorded in OCI. Financial assets at FVOCI are not subject to impairmentassessment.

The Company elected to classify irrevocably its listed equity investments under this category(Note 7).

Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss include financial assets held for trading, financialassets designated upon initial recognition at fair value through profit or loss, or financial assetsmandatorily required to be measured at fair value. Financial assets are classified as held for trading ifthey are acquired for the purpose of selling or repurchasing in the near term. Derivatives, includingseparated embedded derivatives, are also classified as held for trading unless they are designated aseffective hedging instruments. Financial assets with cash flows that are not solely payments of principaland interest are classified and measured at fair value through profit or loss, irrespective of the business

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model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fairvalue through OCI, as described above, debt instruments may be designated at fair value through profitor loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.

Financial assets at fair value through profit or loss are carried in the statement of financial position atfair value with net changes in fair value recognized in the statement of income.

The Company has no financial assets at fair value through profit or loss.

A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separatedfrom the host and accounted for as a separate derivative if: the economic characteristics and risks arenot closely related to the host; a separate instrument with the same terms as the embedded derivativewould meet the definition of a derivative; and the hybrid contract is not measured at fair value throughprofit or loss. Embedded derivatives are measured at fair value with changes in fair value recognizedin profit or loss. Reassessment only occurs if there is either a change in the terms of the contract thatsignificantly modifies the cash flows that would otherwise be required or a reclassification of a financialasset out of the fair value through profit or loss category.

A derivative embedded within a hybrid contract containing a financial asset host is not accounted forseparately. The financial asset host together with the embedded derivative is required to be classifiedin its entirety as a financial asset at fair value through profit or loss.

DerecognitionA financial asset (or, where applicable, a part of a financial asset or part of a group of similar financialassets) is primarily derecognized (i.e., removed from the Company’s statement of financial position)when:

the rights to receive cash flows from the asset have expired, or, the Company has transferred its rights to receive cash flows from the asset or has assumed an

obligation to pay the received cash flows in full without material delay to a third party under a‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risksand rewards of the asset, or (b) the Company has neither transferred nor retained substantially allthe risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into apass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards ofownership. When it has neither transferred nor retained substantially all of the risks and rewards of theasset, nor transferred control of the asset, the Company continues to recognize the transferred asset tothe extent of its continuing involvement. In that case, the Company also recognized an associatedliability. The transferred asset and the associated liability are measured on a basis that reflects the rightsand obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at thelower of the original carrying amount of the asset and the maximum amount of consideration that theCompany could be required to repay.

Modification of contractual cash flowsWhen the contractual cash flows of a financial asset are renegotiated or otherwise modified and therenegotiation or modification does not result in the derecognition of that financial asset, the Companyrecalculates the gross carrying amount of the financial asset as the present value of the renegotiated ormodified contractual cash flows discounted at the original EIR (or credit-adjusted EIR for purchased

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or originated credit-impaired financial assets) and recognizes a modification gain or loss in thestatement of comprehensive income.

When the modification of a financial asset results in the derecognition of the existing financial assetand the subsequent recognition of the modified financial asset, the modified asset is considered a ‘new’financial asset. Accordingly, the date of the modification shall be treated as the date of initialrecognition of that financial asset when applying the impairment requirements to the modified financialasset.

Impairment of financial assetsThe Company recognizes an allowance for expected credit losses (ECLs) for all debt instruments notheld at fair value through profit or loss. ECLs are based on the difference between the contractual cashflows due in accordance with the contract and all the cash flows that the Company expects to receive,discounted at an approximation of the original effective interest rate. The expected cash flows willinclude cash flows from the sale of collateral held or other credit enhancements that are integral to thecontractual terms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significantincrease in credit risk since initial recognition, ECLs are provided for credit losses that result fromdefault events that are possible within the next 12-months (a 12-month ECL). For those credit exposuresfor which there has been a significant increase in credit risk since initial recognition, a loss allowanceis required for credit losses expected over the remaining life of the exposure, irrespective of the timingof the default (a lifetime ECL).

For installment contract receivables and contract assets, the Company applies a simplified approach incalculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognizesa loss allowance based on lifetime ECLs at each reporting date. The Company has established aprovision matrix that is based on its historical credit loss experience, adjusted for forward-lookingfactors specific to the debtors and the economic environment.

The Company considers a financial asset in default when contractual payments are 90 days past due.However, in certain cases, the Company may also consider a financial asset to be in default wheninternal or external information indicates that the Company is unlikely to receive the outstandingcontractual amounts in full before taking into account any credit enhancements held by the Company.A financial asset is written off when there is no reasonable expectation of recovering the contractualcash flows.

b. Financial liabilitiesInitial recognition and measurementFinancial liabilities are classified, at initial recognition, as financial liabilities at fair value through profitor loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in aneffective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowingsand payables, net of directly attributable transaction costs.

The Company’s financial liabilities include accounts payable and accrued expenses.

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Subsequent measurementThe measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss include financial liabilities held for trading andfinancial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasingin the near term. This category also includes derivative financial instruments that are not designated ashedging instruments in hedge relationships as defined by PFRS 9. Separated embedded derivatives arealso classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in the statement of income.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designatedat the initial date of recognition, and only if the criteria in PFRS 9 are satisfied. The Company has notdesignated any financial liability as at fair value through profit or loss.

Loans and borrowingsThis is the category most relevant to the Company. After initial recognition, interest-bearing loans andborrowings are subsequently measured at amortized cost using the EIR method. Gains and losses arerecognized in profit or loss when the liabilities are derecognized as well as through the EIR amortizationprocess.

Amortized cost is calculated by taking into account any discount or premium on acquisition and feesor costs that are an integral part of the EIR. The EIR amortization is included as finance costs in thestatement of income.

This category generally applies to interest-bearing loans and borrowings.

DerecognitionA financial liability is derecognized when the obligation under the liability is discharged or cancelledor expires. When an existing financial liability is replaced by another from the same lender onsubstantially different terms, or the terms of an existing liability are substantially modified, such anexchange or modification is treated as the derecognition of the original liability and the recognition ofa new liability. The difference in the respective carrying amounts is recognized in profit or loss.

The terms are substantially different if the discounted present value of the cash flows under the newterms, including any fees paid net of any fees received and discounted using the original EIR, is at least10% different from the discounted present value of the remaining cash flows of the original financialliability. If an exchange of debt instruments or modification of terms is accounted for as anextinguishment, any costs or fees incurred are recognized as part of the gain or loss on theextinguishment. If the exchange or modification is not accounted for as an extinguishment, any costsor fees incurred adjust the carrying amount of the liability and are amortized over the remaining termof the modified liability.

c. Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount is reported in the statement offinancial position if there is a currently enforceable legal right to offset the recognized amounts andthere is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

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Real Estate Properties for Sale and Real Estate Properties Held for Future DevelopmentProperty acquired or being constructed for sale in the ordinary course of business and held for futuredevelopment, rather than to be held for rental or capital appreciation, is classified as real estateproperties for sale and real estate properties held for future development and are measured at the lowerof cost and net realizable value (NRV).

Cost includes: Land cost Amounts paid to contractors for construction Borrowing costs directly attributable to the acquisition, development and construction of real estate

projects Planning and design costs, costs of site preparation, professional fees, property transfer taxes,

construction overheads and other related costs.

NRV is the estimated selling price in the ordinary course of the business, based on market prices at thereporting date, less estimated costs to complete and the estimated costs necessary to make the sale. TheCompany recognizes the effect of revisions in the total project cost estimates in the year in which thesechanges become known.

Upon commencement of development, the real estate properties held for future development istransferred to real estate properties for sale.

Upon repossession, real estate properties for sale arising from sale cancellations and forfeitures aremeasured at fair value less estimated costs to make the sale. Any resulting gain or loss is credited orcharged to “Other income - net” in the statement of income.

Investment PropertiesInvestment properties which represent real estate properties for lease are measured initially at cost,including transaction costs. The carrying amount includes the cost of replacing part of existinginvestment property at the time that cost is incurred if the recognition criteria are met and excludes thecosts of day-to-day servicing of the property. The carrying values of revalued properties transferred toinvestment properties on January 1, 2004 were considered as the assets’ deemed cost as of said date.

Subsequent to initial measurement, investment properties, except land, are carried at cost lessaccumulated depreciation and amortization and any impairment in value. Land is carried at cost lessany impairment in value.

Investment properties are derecognized when either they have been disposed of or when the propertyis permanently withdrawn from use and no future economic benefit is expected from its disposal. Anygains or losses on the retirement or disposal of investment properties are recognized in the statement ofincome in the year of retirement or disposal.

Transfers are made to investment properties when, and only when, there is a change in use, evidencedby ending of owner-occupation, commencement of an operating lease to another party, or ending ofconstruction or development. Transfers are made from investment properties when, and only when,there is a change in use, evidenced by commencement of owner-occupation or commencement ofdevelopment with a view to sale.

Transfers between investment properties, owner-occupied property and inventories do not change thecarrying amount of the property transferred and they do not change the cost of that property formeasurement or disclosure purposes.

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Impairment of Nonfinancial AssetsThe carrying values of investment properties are reviewed for impairment when events or changes incircumstances indicate that the carrying values may not be recoverable. If any such indication existsand where the carrying value exceeds the estimated recoverable amount, the assets are either writtendown to their recoverable amount or provided with valuation allowance. An asset’s recoverable amountis the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and itsvalue-in-use. Impairment losses, if any, are recognized in the statement of income.

In assessing value in use, the estimated future cash flows are discounted to their present value using apre-tax discount rate that reflects current market assessments of the time value of money and the risksspecific to the asset. In determining fair value less costs of disposal, recent market transactions aretaken into account.

The Company assesses at each reporting period whether there is an indication that previouslyrecognized impairment losses may no longer exist or may have decreased. The Company considersexternal and internal sources of information in its assessment of the reversal of previously recognizedimpairment losses. A previously recognized impairment loss is reversed only if there has been a changein the estimates used to determine the asset’s recoverable amount since the last impairment loss wasrecognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount.That increased amount cannot exceed the carrying amount that would have been determined, net ofdepreciation, had no impairment loss been recognized for the asset in prior years. Such reversal isrecognized in the statement of income. After such a reversal, the depreciation is adjusted in futureperiods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basisover its remaining useful life.

Value-added Tax (VAT)Revenues, expenses, assets and liabilities are recognized net of the amount of VAT, except where theVAT incurred on a purchase of assets or services is not recoverable from the taxation authority, inwhich case the VAT is recognized as part of the cost of acquisition of the asset or as part of the expenseitem as applicable.

When VAT from sales of goods and/or services (output VAT) exceeds VAT passed on from purchasesof goods or services (input VAT), the excess is recognized as payable in the statements of financialposition. When VAT passed on from purchases of goods or services (input VAT) exceeds VAT fromsales of goods and/or services (output VAT), the excess is recognized as an asset in the statement offinancial position to the extent of the recoverable amount.

The net amount of VAT recoverable from or payable to, the taxation authority is included as part of“Other current assets” or “Accounts payable and accrued expenses,” respectively, in the statement offinancial position.

Capital StockCapital stock is measured at par value for all shares issued and outstanding. When the Company issuesmore than one class of stock, a separate account is maintained for each class of stock and the numberof shares issued. Incremental costs incurred directly attributable to the issuance of new shares areshown in equity as a deduction from proceeds, net of tax.

When the shares are sold at premium, the difference between the proceeds and the par value is creditedto the “Additional paid-in capital” account. When shares are issued for a consideration other than cash,the proceeds are measured by the fair value of the consideration received. In case the shares are issuedto extinguish or settle the liability of the Company, the shares shall be measured either at the fair valueof the shares issued or fair value of the liability settled, whichever is more reliably determinable.

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Retained EarningsRetained earnings represent the cumulative balance of net income or loss, dividend distributions, effectsof the changes in accounting policy and other capital adjustments.

The retained earnings include deemed cost adjustment on land recorded under “Investment properties”that arose when the Company transitioned to PFRSs in 2005. The deemed cost adjustment will berealized through sale. The deferred income tax liability on the deemed cost adjustment is transferredto the statement of income upon sale.

Dividend DistributionsCash dividends on common shares are deducted from retained earnings upon declaration by the BOD.

Stock dividends on common shares are measured based on the total par value of declared stockdividend. Stock dividends are deducted from retained earnings when the BOD’s declaration is ratifiedby the stockholders of the Company. Unissued stock dividends are recorded as stock dividendsdistributable and credited to capital stock upon issuance.

Dividends for the year that are declared after the end of the reporting period but before the approval forissuance of financial statements are dealt with as an event after the reporting period.

Treasury sharesOwn equity instruments that are reacquired (treasury shares) are recognized at cost and deducted fromequity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of theCompany’s own equity instruments. Any difference between the carrying amount and theconsideration, if reissued, is recognized in the share premium.

Revenue RecognitionRevenue from Contracts with CustomersThe Company primarily derives its real estate revenue from the sale of real estate projects andundeveloped land. Revenue from contracts with customers is recognized when control of the goods orservices are transferred to the customer at an amount that reflects the consideration to which theCompany expects to be entitled in exchange for those goods or services. The Company has generallyconcluded that it is the principal in its revenue arrangements, except for the provisioning of water,electricity, air-conditioning and common use service area in its office leasing activities, wherein it isacting as agent.

The disclosures of significant accounting judgments, estimates and assumptions relating to revenuefrom contracts with customers are provided in Note 3.

Sales of real estate propertiesThe Company derives its real estate revenue from sale of lots and condominium units. Revenue fromthe sale of these real estate projects under pre-completion stage are recognized over time during theconstruction period (or percentage of completion) since based on the terms and conditions of its contractwith the buyers, the Company’s performance does not create an asset with an alternative use and theCompany has an enforceable right to payment for performance completed to date.

In measuring the progress of its performance obligation over time, the Company uses input method.Input methods recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of aperformance obligation. Progress is measured based on actual resources consumed such as materials,labor hours expended and actual overhead incurred relative to the total expected inputs to thesatisfaction of that performance obligation, or the total estimated development costs of the real estateproject. The Company uses the costs accumulated by the accounting department to determine the actual

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resources used. Input method exclude the effects of any inputs that do not depict the entity’sperformance in transferring control of goods or services to the customer.

Estimated development costs of the real estate project include costs of land, land development, buildingcosts, professional fees, depreciation of equipment directly used in the construction, payments forpermits and licenses. Revisions in estimated development costs brought about by increases in projectedcosts in excess of the original budgeted amounts, form part of total project costs on a prospective basis.

Any excess of progress of work over the right to an amount of consideration is recognized as installmentcontract receivables (unconditional) or contract asset (conditional) in the asset section of the statementof financial position.

Any excess of collections over the total of recognized installment contract receivables is included inthe “Contract liabilities” account in the liabilities section of the statement of financial position.

Cost recognitionThe Company recognizes costs relating to satisfied performance obligations as these are incurred.These include costs of land, land development costs, building costs, professional fees, depreciation,permits and licenses and capitalized borrowing costs. These costs are allocated to the saleable area,with the portion allocable to the sold area being recognized as costs of sales while the portion allocableto the unsold area being recognized as part of real estate inventories.

In addition, the Company recognizes as an asset only costs that give rise to resources that will be usedin satisfying performance obligations in the future and that are expected to be recovered.

Contract BalancesReceivablesA receivable represents the Company’s right to an amount of consideration that is unconditional(i.e., only the passage of time is required before payment of the consideration is due).

Contract assetsA contract asset is the right to consideration in exchange for goods or services transferred to thecustomer. If the Company performs by transferring goods or services to a customer before the customerpays consideration or before payment is due, a contract asset is recognized for the earned considerationthat is conditional.

Contract liabilitiesA contract liability is the obligation to transfer goods or services to a customer for which the Companyhas received consideration (or an amount of consideration is due) from the customer. If a customer paysconsideration before the Company transfers goods or services to the customer, a contract liability isrecognized when the payment is made, or the payment is due (whichever is earlier). Contract liabilitiesare recognized as revenue when the Company performs its obligations under the contract.

The contract liabilities also include payments received by the Company from the customers for whichrevenue recognition has not yet commenced.

Costs to obtain contractThe incremental costs of obtaining a contract with a customer are recognized as an asset if the Companyexpects to recover them. The Company has determined that commissions paid to sales personnel on thesale of pre-completed real estate units are deferred when recovery is reasonably expected and arecharged to expense in the period in which the related revenue is recognized as earned. Commissionexpense is included in the “Operating expenses” account in the statement of income.

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Costs incurred prior to obtaining contract with customer are not capitalized but are expensed asincurred.

Amortization and derecognition of capitalized costs to obtain a contractThe Company amortizes capitalized costs to obtain a contract to cost of sales over the expectedconstruction period using percentage of completion following the pattern of real estate revenuerecognition. The amortization is included within operating expenses.

Capitalized costs to obtain a contract is derecognized either when it is disposed of or when no furthereconomic benefits are expected to flow from its use or disposal.

Interest incomeInterest income from cash in banks, cash equivalents, short-term investments, installment contractsreceivable and contract assets is recognized as the interest accrues taking into account the effectiveyield on interest.

Dividend incomeDividend income is recognized when the Company’s right to receive the payment is established.

LeasesThe Company assesses at contract inception whether a contract is, or contains, a lease. That is, if thecontract conveys the right to control the use of an identified asset for a period of time in exchange forconsideration.

Short-term leases and leases of low-value assetsThe Company applies the short-term lease recognition exemption to its short-term leases of office spaceand transportation equipment (i.e., those leases that have a lease term of 12 months or less from thecommencement date and do not contain a purchase option). It also applies the leases of low-value assetsrecognition exemption to leases of office equipment that are considered of low value. The Companydoes not have any lease of low-value assets. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term.

Company as a lessorLeases in which the Company does not transfer substantially all the risks and rewards of ownership ofan asset are classified as operating leases. Rental income arising is accounted for on a straight-line basisover the lease terms and is included in revenue in the statement of income due to its operating nature.Initial direct costs incurred in negotiating and arranging an operating lease are added to the carryingamount of the leased asset and recognized over the lease term on the same basis as rental income.Contingent rents are recognized as revenue in the period in which they are earned.

Lease modificationLease modification is defined as a change in the scope of a lease, or the consideration for a lease, thatwas not part of the original terms and conditions of the lease e.g., addition or termination of the rightto use one or more underlying assets, or the extension or shortening of the contractual lease term.

In case of a lease modification, the lessor shall account for any such modification by recognizing a newlease from the effective date of the modification, considering any prepaid or accrued lease paymentsrelating to the original lease as part of the lease payments for the new lease. In case of change in leasepayments for an operating lease that does not meet the definition of a lease modification, the lessorshall account for any such change as a negative variable lease payment and recognize lower leaseincome.

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Operating expensesOperating expenses constitute costs of administering the business. These costs are expensed as incurred.

Financial expensesFinancial expenses consist of interest incurred on notes payable. Interest attributable to a qualifyingasset is capitalized as part of the cost of the asset while others are expensed as incurred.

Interest costs are capitalized if they are directly attributable to the acquisition, development andconstruction of real estate projects as part of the cost of such projects. Capitalization of interest cost(1) commences when the activities to prepare the assets for their intended use are in progress andexpenditures and interest costs are being incurred, (2) is suspended during extended periods in whichactive development is interrupted, and (3) ceases when substantially all the activities necessary toprepare the assets for their intended use are complete. If the carrying amount of the asset exceeds itsrecoverable amount, an impairment loss is recorded.

Other income - netNet other income pertains mainly to the gain or loss arising from forfeiture or cancellation of prioryears’ real estate sales arising from the difference between the outstanding balance of receivables andthe original cost of the inventories.

Retirement Benefits CostThe net defined benefit liability or asset is the aggregate of the present value of the defined benefitobligation at the end of the reporting period reduced by the fair value of plan assets (if any), adjustedfor any effect of limiting a net defined benefit asset to the asset ceiling. The asset ceiling is the presentvalue of any economic benefits available in the form of refunds from the plan or reductions in futurecontributions to the plan.

The cost of providing benefits under the defined benefit plans is actuarially determined using theprojected unit credit method.

Retirement benefits cost comprises the following: Service cost Net interest on the net defined benefit liability or asset Re-measurements of net defined benefit liability or asset

Service costs which include current service costs, past service costs and gains or losses on non-routinesettlements are recognized as expense in the statement of income. Past service costs are recognizedwhen plan amendment or curtailment occurs. These amounts are calculated periodically by independentqualified actuary.

Net interest on the net defined benefit liability or asset is the change during the period in the net definedbenefit liability or asset that arises from the passage of time which is determined by applying thediscount rate based on government bonds to the net defined benefit liability or asset. Net interest on thenet defined benefit liability or asset is recognized as expense or income in the statement of income.

Re-measurements comprising actuarial gains and losses, return on plan assets and any change in theeffect of the asset ceiling (excluding net interest on defined benefit liability) are recognized immediatelyin the statement of comprehensive income in the period in which they arise. Re-measurements are notreclassified to profit or loss in subsequent periods.

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Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurancepolicies. Plan assets are not available to the creditors of the Company, nor can they be paid directly tothe Company. Fair value of plan assets is based on market price information. When no market price isavailable, the fair value of plan assets is estimated by discounting expected future cash flows using adiscount rate that reflects both the risk associated with the plan assets and the maturity or expecteddisposal date of those assets (or, if they have no maturity, the expected period until the settlement ofthe related obligations). If the fair value of the plan assets is higher than the present value of the definedbenefit obligation, the measurement of the resulting defined benefit asset is limited to the present valueof economic benefits available in the form of refunds from the plan or reductions in future contributionsto the plan.

The Company’s right to be reimbursed of some or all of the expenditure required to settle a definedbenefit obligation is recognized as a separate asset at fair value when and only when reimbursement isvirtually certain.

Employee leave entitlementEmployee entitlements to annual leave are recognized as a liability when they are earned by theemployees. The undiscounted liability for leave expected to be settled within 12 months after the endof the reporting period is recognized for services rendered by employees up to the end of the reportingperiod. Accumulating leave credits which can be utilized anytime when needed or converted to cashupon employee separation (i.e., resignation or retirement) are presented at its discounted amount as“Accounts payable and accrued expenses - noncurrent portion” account in the statement of financialposition.

Provisions and ContingenciesProvisions are recognized when the Company has a present obligation (legal or constructive) as a resultof a past event, it is probable that an outflow of resources embodying economic benefits will be requiredto settle the obligation and a reliable estimate can be made of the amount of the obligation. When theCompany expects some or all of a provision to be reimbursed, for example, under an insurance contract,the reimbursement is recognized as a separate asset, but only when the reimbursement is virtuallycertain. The expense relating to a provision is presented in the statement of income net of anyreimbursement. If the effect of the time value of money is material, provisions are determined bydiscounting the effective future cash flows at a pre-tax rate that reflects current market assessment ofthe time value of money and where appropriate, the risks specific to the liability. Where discounting isused, the increase in the provisions due to the passage of time is recognized as an interest expense.

Contingent liabilities are not recognized in the financial statements. They are disclosed unless thepossibility of an outflow of resources embodying economic benefits is remote. A contingent asset isnot recognized in the financial statements but disclosed in the notes to financial statements when aninflow of economic benefits is probable.

Income TaxesCurrent income taxCurrent income tax assets and liabilities for the current and prior periods are measured at the amountexpected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used tocompute the amount are those that are enacted or substantively enacted at the end of reporting period.

Current income tax for current and prior periods shall, to the extent unpaid, be recognized as a liabilityunder “Income tax payable” account in the statement of financial position. If the amount already paidin respect of current and prior periods exceeds the amount due for those periods, the excess shall berecognized as an asset under “Other current assets” account in the statement of financial position.

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Deferred income taxDeferred income tax is recognized on all temporary differences at the end of reporting period betweenthe tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognized for all taxable temporary differences. Deferred incometax assets are recognized for all deductible temporary differences to the extent that it is probable thatsufficient future taxable profits will be available against which the deductible temporary differencescan be utilized. Deferred income tax assets and deferred income tax liabilities are not recognized whenit arises from the initial recognition of an asset or liability in a transaction that is not a businesscombination and, at the time of the transaction, affects neither the accounting profit nor taxable profitor loss.

The carrying amount of deferred income tax assets is reviewed at each end of reporting period andreduced to the extent that it is no longer probable that sufficient future taxable profits will be availableto allow all or part of the deferred income tax assets to be utilized. Unrecognized deferred income taxassets are reassessed at each end of reporting period and are recognized to the extent that it has becomeprobable that sufficient future taxable profits will allow the deferred income tax asset to be recovered.

Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that areexpected to apply to the period when the asset is realized, or the liability is settled, based on tax ratesand tax laws that have been enacted or substantively enacted at the end of reporting period.

Deferred income tax relating to items recognized directly in equity is recognized in equity and thosedirectly in comprehensive income such as re-measurement of defined benefit plan are recognized in thestatement of comprehensive income and not in the statement of income.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable rightexists to offset current tax assets against current income tax liabilities and the deferred taxes relate tothe same taxable entity and the same taxation authority.

Other Comprehensive IncomeOther comprehensive income comprises items of income and expense that are not recognized in thestatement of income in accordance with PFRSs. Other comprehensive income of the Company includesgains and losses on fair value changes of financial assets/available-for-sale financial assets,remeasurements comprising actuarial gains and losses, return on plan assets and any change in theeffect of the asset ceiling (excluding net interest on defined benefit liability).

Earnings Per ShareBasic earnings per share is computed by dividing the net income for the year by the weighted averagenumber of ordinary shares issued and outstanding after considering the retrospective effect, if any, ofstock dividends declared during the year.

Diluted earnings per share is calculated by dividing the net income for the year by the weighted averagenumber of ordinary shares outstanding during the year, excluding treasury shares, and adjusted for theeffects of all dilutive potential common shares, if any. In determining both the basic and dilutedearnings per share, the effect of stock dividends, if any, is accounted for retrospectively.

Segment ReportingThe Company’s operating businesses are organized and managed separately according to the nature ofthe products and services provided, with each segment representing a strategic business unit that offersdifferent products and serves different markets. Financial information on business segments ispresented in Note 25 in the financial statements. The Company’s asset-producing revenues are located

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in the Philippines (i.e., one geographical location). Therefore, geographical segment information is nolonger presented.

Events After the Reporting PeriodPost year-end events that provide additional information about the Company’s financial position at theend of reporting period (adjusting events) are reflected in the financial statements. Post year-end eventsthat are not adjusting events are disclosed in the notes to the financial statements when material.

Standards Issued but not yet EffectivePronouncements issued but not yet effective are listed below. Unless otherwise indicated, the Companydoes not expect that the future adoption of the said pronouncements will have a significant impact onits financial statements. The Company intends to adopt the following pronouncements when theybecome effective.

Effective beginning on or after January 1, 2021

Amendments to PFRS 9, PFRS 7, PFRS 4 and PFRS 16, Interest Rate Benchmark Reform –Phase 2

The amendments provide the following temporary reliefs which address the financial reportingeffects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-freeinterest rate (RFR):

Practical expedient for changes in the basis for determining the contractual cash flows as aresult of IBOR reform

Relief from discontinuing hedging relationships Relief from the separately identifiable requirement when an RFR instrument is designated

as a hedge of a risk component

The Company shall also disclose information about: The about the nature and extent of risks to which the entity is exposed arising from financial

instruments subject to IBOR reform, and how the entity manages those risks; and Their progress in completing the transition to alternative benchmark rates, and how the

entity is managing that transition

The amendments are effective for annual reporting periods beginning on or afterJanuary 1, 2021 and apply retrospectively, however, the Company is not required to restate priorperiods. These amendments will affect the Company if it will enter into hedge transaction in thefuture.


Amendments to PFRS 3, Reference to the Conceptual Framework

The amendments are intended to replace a reference to the Framework for the Preparation andPresentation of Financial Statements, issued in 1989, with a reference to the Conceptual Frameworkfor Financial Reporting issued in March 2018 without significantly changing its requirements. Theamendments added an exception to the recognition principle of PFRS 3, Business Combinations toavoid the issue of potential ‘day 2’gains or losses arising for liabilities and contingent liabilitiesthat would be within the scope of PAS 37, Provisions, Contingent Liabilities and Contingent Assetsor Philippine-IFRIC 21, Levies, if incurred separately.

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At the same time, the amendments add a new paragraph to PFRS 3 to clarify that contingent assetsdo not qualify for recognition at the acquisition date.

The amendments are effective for annual reporting periods beginning on or after January 1, 2022and apply prospectively. The amendments will not significantly affect the Company’s financialstatements.

Amendments to PAS 16, Plant and Equipment: Proceeds before Intended Use

The amendments prohibit entities deducting from the cost of an item of property, plant andequipment, any proceeds from selling items produced while bringing that asset to the location andcondition necessary for it to be capable of operating in the manner intended by management.Instead, an entity recognizes the proceeds from selling such items, and the costs of producing thoseitems, in profit or loss.

The amendment is effective for annual reporting periods beginning on or after January 1, 2022 andmust be applied retrospectively to items of property, plant and equipment made available for useon or after the beginning of the earliest period presented when the entity first applies theamendment.

The amendments are not expected to have a material impact on the Company.

Amendments to PAS 37, Onerous Contracts – Costs of Fulfilling a Contract

The amendments specify which costs an entity needs to include when assessing whether a contractis onerous or loss-making. The amendments apply a “directly related cost approach”. The costs thatrelate directly to a contract to provide goods or services include both incremental costs and anallocation of costs directly related to contract activities. General and administrative costs do notrelate directly to a contract and are excluded unless they are explicitly chargeable to thecounterparty under the contract.

The amendments are effective for annual reporting periods beginning on or after January 1, 2022.The Company will apply these amendments to contracts for which it has not yet fulfilled all itsobligations at the beginning of the annual reporting period in which it first applies the amendments.The amendments are not expected to have a material impact on the Company.

Annual Improvements to PFRSs 2018-2020 Cycle

Amendments to PFRS 1, First-time Adoption of Philippines Financial Reporting Standards,Subsidiary as a first-time adopter

The amendment permits a subsidiary that elects to apply paragraph D16(a) of PFRS 1 tomeasure cumulative translation differences using the amounts reported by the parent, based onthe parent’s date of transition to PFRS. This amendment is also applied to an associate or jointventure that elects to apply paragraph D16(a) of PFRS 1.

The amendment is effective for annual reporting periods beginning on or afterJanuary 1, 2022 with earlier adoption permitted. The amendments are not expected to have amaterial impact on the Company.

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Amendments to PFRS 9, Financial Instruments, Fees in the ‘10 per cent’ test for derecognitionof financial liabilities

The amendment clarifies the fees that an entity includes when assessing whether the terms ofa new or modified financial liability are substantially different from the terms of the originalfinancial liability. These fees include only those paid or received between the borrower and thelender, including fees paid or received by either the borrower or lender on the other’s behalf.An entity applies the amendment to financial liabilities that are modified or exchanged on orafter the beginning of the annual reporting period in which the entity first applies theamendment.

The amendment is effective for annual reporting periods beginning on or afterJanuary 1, 2022 with earlier adoption permitted. The Company will apply the amendments tofinancial liabilities that are modified or exchanged on or after the beginning of the annualreporting period in which the entity first applies the amendment. The amendments are notexpected to have a material impact on the Company.

Amendments to PAS 41, Agriculture, Taxation in fair value measurements

The amendment removes the requirement in paragraph 22 of PAS 41 that entities exclude cashflows for taxation when measuring the fair value of assets within the scope of PAS 41.

An entity applies the amendment prospectively to fair value measurements on or after thebeginning of the first annual reporting period beginning on or after January 1, 2022 with earlieradoption permitted. The amendments are not expected to have a material impact on theCompany.


Amendments to PAS 1, Classification of Liabilities as Current or Non-current

The amendments clarify paragraphs 69 to 76 of PAS 1, Presentation of Financial Statements, tospecify the requirements for classifying liabilities as current or non-current. The amendmentsclarify:

What is meant by a right to defer settlement That a right to defer must exist at the end of the reporting period That classification is unaffected by the likelihood that an entity will exercise its deferral

right That only if an embedded derivative in a convertible liability is itself an equity instrument

would the terms of a liability not impact its classification

The amendments are effective for annual reporting periods beginning on or after January 1, 2023and must be applied retrospectively. The Company is currently assessing the impact theamendments will have on its current practice and whether existing loan agreements may requirerenegotiation.

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PFRS 17, Insurance Contracts

PFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognitionand measurement, presentation and disclosure. Once effective, PFRS 17 will replace PFRS 4,Insurance Contracts. This new standard on insurance contracts applies to all types of insurancecontracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entitiesthat issue them, as well as to certain guarantees and financial instruments with discretionaryparticipation features. A few scope exceptions will apply.

The overall objective of PFRS 17 is to provide an accounting model for insurance contracts that ismore useful and consistent for insurers. In contrast to the requirements in PFRS 4, which are largelybased on grandfathering previous local accounting policies, PFRS 17 provides a comprehensivemodel for insurance contracts, covering all relevant accounting aspects. The core of PFRS 17 is thegeneral model, supplemented by:

A specific adaptation for contracts with direct participation features (the variable feeapproach)

A simplified approach (the premium allocation approach) mainly for short-durationcontracts

PFRS 17 is effective for reporting periods beginning on or after January 1, 2023, with comparativefigures required. Early application is permitted.

PFRS 17 will affect the Company if it enters insurance contracts in the future.

Deferred effectivity

Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or Contributionof Assets between an Investor and its Associate or Joint Venture

The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss ofcontrol of a subsidiary that is sold or contributed to an associate or joint venture. The amendmentsclarify that a full gain or loss is recognized when a transfer to an associate or joint venture involvesa business as defined in PFRS 3. Any gain or loss resulting from the sale or contribution of assetsthat does not constitute a business, however, is recognized only to the extent of unrelated investors’interests in the associate or joint venture.

On January 13, 2016, the FRSC deferred the original effective date of January 1, 2016 of the saidamendments until the International Accounting Standards Board (IASB) completes its broaderreview of the research project on equity accounting that may result in the simplification ofaccounting for such transactions and of other aspects of accounting for associates and jointventures. The amendments are not expected to affect the Company’s financial statements.

Deferral of Certain Provisions of PIC Q&A 2018-12, PFRS 15 Implementation Issues Affecting theReal Estate Industry (as amended by PIC Q&As 2020-02 and 2020-04)

On February 14, 2018, the PIC issued PIC Q&A 2018-12 (PIC Q&A) which provides guidance onsome implementation issues of PFRS 15 affecting real estate industry. On October 25, 2018 andFebruary 8, 2019, the Philippine SEC issued SEC Memorandum Circular No. 14, Series of 2018,and SEC Memorandum Circular No. 3, Series of 2019, respectively, providing relief to the realestate industry by deferring the application of the following provisions of the above PIC Q&A fora period of 3 years until December 31, 2020. On December 15, 2020, the Philippine SEC issuedSEC Memorandum Circular No. 34, Series of 2020, which further extended the deferral of certain

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provisions of this PIC Q&A until December 31, 2023. A summary of the PIC Q&A provisionscovered by the SEC deferral follows:

Deferral Period1. Assessing if the transaction price includes a significant

financing component as discussed in PIC Q&A 2018-12-D(as amended by PIC Q&A 2020-04)

Until December 31, 2023

2. Treatment of land in the determination of the POC discussedin PIC Q&A 2018-12-E


3. Treatment of uninstalled materials in the determination of thePOC discussed in PIC Q&A 2018-12-E (as amended by PICQ&A 2020-02)


4. Accounting for CUSA Charges discussed in PIC Q&ANo. 2018-12-H


In November 2020, the PIC issued the following Q&As which provide additional guidance on thereal estate industry issues covered by the above SEC deferrals:

PIC Q&A 2020-04 on determining whether the transaction price includes a significantfinancing component.

PIC Q&A 2020-02 on determining which uninstalled materials should not be included incalculating the POC.

After the deferral period, real estate companies would have to adopt PIC Q&A No. 2018-12 and anysubsequent amendments thereto retrospectively or as the SEC shall later prescribe.

The Company availed of the option to defer adoption of the above specific provisions except forland exclusion in the determination of POC. Had these provisions been adopted, it would haveimpacted retained earnings, revenue from real estate sales, cost of real estate sold, other income andreal estate inventories.

IFRIC Agenda Decision on Over Time Transfer of Constructed Good (PAS 23, Borrowing Costs)

In March 2019, IFRIC published an Agenda Decision on whether borrowing costs can becapitalized on real estate inventories that are under construction and for which the related revenueis recognized over time under paragraph 35(c) of IFRS 15 (PFRS 15). IFRIC concluded thatborrowing costs cannot be capitalized for such real estate inventories as they do not meet thedefinition of a qualifying asset under PAS 23, Borrowing Costs, considering that these inventoriesare ready for their intended sale in their current condition.

On February 11, 2020, the Philippine SEC issued Memorandum Circular No. 4, Series of 2020,providing relief to the real estate industry by deferring the mandatory implementation of the aboveIFRIC Agenda Decision until December 31, 2020. Further, on December 15, 2020, the PhilippineSEC issued SEC MC No. 34, Series of 2020, which extends the relief on the application of theIFRIC Agenda Decision provided to the real estate industry until December 31, 2023. EffectiveJanuary 1, 2024, the real estate industry will adopt the IFRIC Agenda Decision and any subsequentamendments thereto retrospectively or as the SEC will later prescribe. A real estate company mayopt not to avail of the deferral and instead comply in full with the requirements of the IFRIC AgendaDecision.

The Company opted to avail of the relief as provided by the SEC. The adoption of the IFRIC AgendaDecision is not expected to have significant impact on the financial statements.

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Deferral of PIC Q&A 2018-14, Accounting for Cancellation of Real Estate Sales (as amended byPIC Q&A 2020-05)

On June 27, 2018, PIC Q&A 2018-14 was issued providing guidance on accounting for cancellationof real estate sales. Under SEC Memorandum Circular No. 3, Series of 2019, the adoption of PICQ&A No. 2018-14 was deferred until December 31, 2020. After the deferral period, real estatecompanies will adopt PIC Q&A No. 2018-14 and any subsequent amendments thereto retrospectivelyor as the SEC shall later prescribe.

On November 11, 2020, PIC Q&A 2020-05 was issued which supersedes PIC Q&A 2018-14. ThisPIC Q&A adds a new approach where the cancellation is accounted for as a modification of thecontract (i.e., from non-cancellable to being cancellable). Under this approach, revenues and relatedcosts previously recognized shall be reversed in the period of cancellation and the inventory shall bereinstated at cost. PIC Q&A 2020-05 shall have to be applied prospectively from approval date ofthe Financial Reporting Standards Council which was November 11, 2020.

The Company availed of the SEC relief to defer the adoption of this PIC Q&A untilDecember 31, 2020. The adoption of this PIC Q&A is not expected to have significant impact on thefinancial statements.

As prescribed by SEC Memorandum Circular No. 34, Series of 2020, for financial reporting periodsbeginning on or after January 1, 2021, the availment of the above deferral will impact theCompany’s financial reporting during the period of deferral.

3. Significant Accounting Judgments, Estimates and Assumptions

The preparation of the financial statements requires management to make judgments, estimates andassumptions that affect the amounts reported in the financial statements and accompanying notes.

In the opinion of management, these financial statements reflect all adjustments necessary to presentfairly the results for the periods presented. Actual results could differ from such estimates.

JudgmentsIn the process of applying the Company’s accounting policies, management has made the judgmentsenumerated below, apart from those involving estimations, which have the most significant effect onthe amounts recognized in the financial statements.

Revenue recognitionSelecting the appropriate revenue recognition method for a particular real estate transaction requirescertain judgments based on the following, among others:

Existence of a contractThe Company’s primary document for a contract with a buyer is a signed contract to sell. It hasdetermined however, that in cases wherein contract to sell are not signed by both parties, thecombination of other signed documentation such as reservation agreement, official receipts andother documents, would contain all the criteria to qualify as contract with the buyer underPFRS 15.

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In addition, part of the assessment process of the Company before revenue recognition is to assessthe probability that the Company will collect the consideration to which it will be entitled inexchange for the real estate property that will be transferred to the buyer. In evaluating whethercollectability of an amount of consideration is probable, an entity considers whether the buyer hasmet the required down payment in relation to the total contract price. Collectability is also assessedby considering factors such as the credit standing and financial capacity of the buyer, age andlocation of the property. Management regularly evaluates the historical cancellations and back-outsif it would still support its current threshold of buyers’ equity before commencing revenuerecognition.

Revenue recognition method and measure of progressThe Company concluded that revenue for real estate sales is to be recognized over time because(a) the Company’s performance does not create an asset with an alternative use and; (b) theCompany has an enforceable right for performance completed to date. The promised property isspecifically identified in the contract and the contractual restriction on the Company’s ability todirect the promised property for another use is substantive. This is because the property promisedto the buyer is not interchangeable with other properties without breaching the contract and withoutincurring significant costs that otherwise would not have been incurred in relation to that contract.In addition, under the current legal framework, the buyer is contractually obliged to make paymentsto the developer up to the performance completed to date.

The Company has determined that input method used in measuring the progress of the performanceobligation faithfully depicts the Company’s performance in transferring control of real estatedevelopment to the buyers.

Identifying performance obligationThe Company has various contracts to sell covering its sale of condominium units and other realestate properties. The Company concluded that there is one performance obligation in each of thesecontracts. For the contract covering condominium unit, the developer has the obligation to deliverthe condominium unit duly constructed in a specific lot and fully integrated into the serviced landin accordance with the approved plan. For the sale of real estate properties such as raw land, theCompany integrates certain activities to the said property to be able to deliver the property basedon the contract with the buyer. Included also in this performance obligation is the Company’sservice to transfer the title of the real estate unit to the customer.

Principal versus agent considerationsThe contract for the office spaces and condominium units leased out by the Company to its tenantsincludes the right to charge for the electricity and water usage.

For electricity and water usage, the Company determined that it is acting as an agent because thepromise of the Company to the tenants is to arrange for the electricity and water supply to beprovided by a utility company. The utility company, and not the real estate developer, is primarilyresponsible for the provisioning of the utilities while the Company, administers the leased spacesand coordinates with the utility companies to ensure that tenants have access to these utilities. TheCompany does not have the discretion on the pricing of the services provided since the price isbased on the actual rate charged by utility providers.

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Distinction between investment properties and owner-occupied propertiesThe Company determines whether a property qualifies as investment property. In making its judgment,the Company considers whether the property generates cash flows largely independent of the otherassets held by an entity. Owner-occupied properties generate cash flows that are attributable not onlyto the property but also to the other assets used for administrative purposes.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and anotherportion that is held for use for administrative purposes. If these portions cannot be sold separately atthe reporting date, the property is accounted for as investment property only if an insignificant portionis held for administrative purposes. Judgment is applied in determining whether ancillary services areso significant that a property does not qualify as investment property. The Company considers eachproperty separately in making its judgment.

Investment properties amounted to P=181.14 million as of December 31, 2020 and 2019 (see Note 9).

Distinction between real estate properties for sale and investment propertiesThe Company determines whether a property is classified as for sale, for lease or for capitalappreciation.

Real estate properties which the Company develops and intends to sell on or before completion ofconstruction are classified as real estate properties for sale. Real estate properties for sale amounted toP=1,138.43 million and P=1,005.86 million as of December 31, 2020 and 2019, respectively (see Note 8).Real estate properties which are not occupied substantially for use by, or in the operations of theCompany, nor for sale in the ordinary course of business, but are held primarily to earn rental incomeand capital appreciation are classified as investment properties. Investment properties amounted toP=181.14 million as of December 31, 2020 and 2019 (see Note 9).

Distinction between real estate properties for sale and held for future developmentThe Company determines whether a property will be classified as real estate properties for sale or heldfor future development. In making this judgment, the Company considers whether the property will besold in the normal operating cycle (real estate properties for sale) or whether it will be retained as partof the Company’s strategic land banking activities for development or sale in the medium or long-term(real estate properties held for future development). Real estate properties for sale amounted toP=1,138.43 million and P=1,005.86 million as of December 31, 2020 and 2019, respectively (see Note 8).Real estate properties held for future development amounted to P=494.36 million and P=491.81 millionas of December 31, 2020 and 2019, respectively (see Note 8).

Operating lease commitments - Company as lessorManagement has determined that the Company retains all the significant risks and rewards of ownershipof the properties and thus, accounts for the contracts as operating leases. The ownership of the asset isnot transferred to the lessee by the end of the lease term, the lessee has no option to purchase the assetat a price that is expected to be sufficiently lower than the fair value at the date the option is exercisable,and, the lease term is not for the major part of the asset’s economic life.

Lease modification - Company as lessorThroughout the government-imposed community quarantine, the Company waived rentals and offereddeferral of payments to certain tenants. Such rental waivers and deferrals are accounted as a leasemodification under PFRS 16 since impact of COVID-19 pandemic is not contemplated by the partiesupon inception of the lease contracts.

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Determination of taxable profit, tax bases, unused tax losses, unused tax credits and tax ratesIn accordance with Philippine Interpretation IFRIC-23, Uncertainty over Income Tax Treatments, theCompany has assessed whether it has any uncertain tax position. The Company applies significantjudgement in identifying uncertainties over its income tax treatments.

EstimatesThe key assumptions concerning the future and other key sources of estimation uncertainty at the endof reporting period that have a significant risk of causing a material adjustment to the carrying amountsof assets and liabilities within the next financial year are discussed below.

Revenue recognition method and measure of progressThe measurement of progress for revenue recognition requires management to make use of estimatesand assumptions. The Company’s real estate sales is based on the percentage-of-completion methodmeasured principally on the basis of total actual cost of resources consumed such as materials, laborhours expended and actual overhead incurred over the total estimated development cost of the project.Estimated development costs of the project include costs of land, land development, building costs,professional fees, depreciation of equipment directly used in the construction, payments for permitsand licenses. The estimated development cost is prepared by the Company’s project engineers and areindependently reviewed by the Company’s third-party independent project engineers. Revisions inestimated development costs brought about by increases in projected costs in excess of the originalbudgeted amounts, form part of total project costs on a prospective basis and is allocated between costsof sales and real estate inventories.

Estimation of POC of real estate projectsThe Company estimates the POC of ongoing projects for purposes of accounting for the estimated costsof development as well as revenue to be recognized. Actual costs of development could differ fromthese estimates. Such estimates will be adjusted accordingly when the effects become reasonablydeterminable. The POC is based on the technical evaluation of the independent project engineers aswell as management’s monitoring of the costs, progress and improvements of the projects. Gross profiton sales of real estate properties amounted to P=101.40 million, P=222.43 million, and P=193.33 millionin 2020, 2019 and 2018, respectively.

Provision for expected credit losses of installment contract receivables and contract assetsThe Company uses a provision matrix to calculate ECLs for installment contract receivables andcontract assets. The provision rates are based on past collection history and other factors, which include,but are not limited to the length of the Company’s relationship with the buyer, the buyer’s paymentbehavior, known market factors that affect the collectability of the accounts.

The provision matrix is initially based on the Company’s historical observed default rates. TheCompany will calibrate the matrix to adjust the historical credit loss experience with forward-lookinginformation such as the inflation rate, gross domestic product, interest rate and unemployment rate. Forinstance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate overthe next year which can lead to an increased number of defaults in the real estate sector, the historicaldefault rates are adjusted. At every reporting date, the historical observed default rates are updated andchanges in the forward-looking estimates are analyzed.

The assessment of the correlation between historical observed default rates, forecast economicconditions such as inflation rate, gross domestic product, interest rate and unemployment rate and ECLsis a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecasteconomic conditions. The Company’s historical credit loss experience and forecast of economicconditions may also not be representative of buyer’s actual default in the future. The information aboutthe ECLs on the Company’s installment contract receivables and contract assets is disclosed in

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Note 22. As of December 31, 2020 and 2019, installment contracts receivable, contract assets and otherreceivables aggregated to P=413.59 million and P=471.90 million, respectively. There was no provisionfor expected credit loss on receivables in 2020 and 2019 (see Notes 5 and 6).

Revenue and cost recognitionThe Company’s revenue recognition and cost policies require management to make use of estimatesand assumptions that may affect the reported amount of revenue and cost. The Company’s revenuefrom real estate properties based on the POC is measured principally on the basis of the estimatedcompletion of a physical proportion of the contract work. Gross profit on sales of real estate propertiesamounted to P=101.40 million, P=222.43 million and P=193.33 million and in 2020, 2019 and 2018,respectively.

Determination of net realizable value of real estate properties for sale and held for future developmentThe Company’s estimates of the net realizable value of real estate properties for sale and held for futuredevelopment are based on the most reliable evidence available at the time the estimates are made, orthe amount that the real estate properties for sale and held for future development are expected to berealized. These estimates consider the fluctuations of price or cost directly relating to events occurringafter the end of the reporting period to the extent that such events confirm conditions existing at theend of the period. A new assessment is made of net realizable value in each subsequent period. Whenthe circumstances that previously caused the real estate properties for sale and held for futuredevelopment to be written down below cost no longer exist or when there is a clear evidence of anincrease in net realizable value because of changes in economic circumstances, the amount of the write-down is reversed so that the new carrying amount is the lower of the cost and the revised net realizablevalue. The Company’s real estate properties for sale amounted to P=1,138.43 million andP=1,005.86 million as of December 31, 2020 and 2019, respectively (see Note 8). Real estate propertiesheld for future development amounted to P=494.36 million and P=491.81 million as ofDecember 31, 2020 and 2019, respectively (see Note 8).

Determination of the fair value of investment propertiesThe Company discloses the fair values of its investment properties in accordance with PAS 40,Investment Property. The Company engaged SEC-accredited independent valuation specialists todetermine the fair value as of December 31, 2020 and 2019. The Company’s investment propertiesconsist of land and building pertaining to commercial properties. These are valued by reference to salesof similar or substitute properties and other related market data had the investment properties beentransacted in the market. The significant unobservable inputs used in determining the fair value are thesales price per square meter of similar or substitute property, location, size, shape of lot and the highestand best use. Another method used in determining the fair value of land properties is based on themarket data approach. The value of land is based on sales and listings of comparable property registeredwithin the vicinity. This requires adjustments of comparable property by reducing reasonablecomparative sales and listings to a common denominator by adjusting the difference between thesubject property and those actual sales and listings regarded as comparables. The comparison ispremised on the factors of location; size and shape of the lot; time element and others. The fair valueof investment properties as of December 31, 2020 and 2019 amounted to P=927.28 million andP=788.50 million, respectively (see Notes 9 and 22). The carrying value of the investment properties asof December 31, 2020 and 2019 amounted to P=181.14 million (see Note 9).

Determination of impairment indicators on investment propertiesThe Company determines whether its nonfinancial assets such as investment properties are impairedwhen impairment indicators exist such as significant underperformance relative to expected historicalor projected future operating results and significant negative industry or economic trends. When animpairment indicator is noted, the Company makes an estimation of the value-in-use of thecash-generating units to which the assets belong. Estimating the value-in-use requires the Company to

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make an estimate of the expected future cash flows from the cash-generating unit and also to choose anappropriate discount rate in order to calculate the present value of those cash flows. No impairmentindicator was noted as of December 31, 2020 and 2019. Net book values of investment properties as ofDecember 31, 2020 and 2019 amounted to P=181.14 million (see Note 9).

Estimation of retirement benefits costThe cost of the defined benefit plan and the present value of the defined benefit obligation aredetermined using actuarial valuations which involves making various assumptions that may differ fromactual developments in the future. These assumptions include the determination of the discount rate,future salary increases, mortality rates, and future pension increases. Due to the complexities involvedin the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes inthese assumptions. All assumptions are reviewed at each reporting date.

In determining the appropriate discount rate, management considers the PDEX PDST-R2 rates atvarious tenors, rates for intermediate durations were interpolated and the rates were then weighted bythe expected benefits payments at those durations to arrive at the single weighted average discount rate.

The mortality rate is based on publicly available mortality table in the Philippines. Future salaryincreases are based on expected future inflation rates. Further details about assumptions used are givenin Note 19.

Net retirement benefits costs amounted to P=2.45 million, P=1.56 million and P=1.29 million in 2020, 2019and 2018, respectively. Retirement benefits liability amounted to P=3.95 million and P=8.31 million as ofDecember 31, 2020 and 2019, respectively (see Note 19).

Recognition of deferred income tax assetsThe Company reviews the carrying amounts of deferred income tax assets at the end of each reportingperiod and reduces deferred income tax assets to the extent that it is no longer probable that sufficientfuture taxable profits will be available to allow all or part of the deferred income tax assets to be utilized.

As of December 31, 2020 and 2019, deferred income tax asset amounted to P=9.02 million andP=20.54 million, respectively (see Note 20).

4. Cash and Cash Equivalents and Short-term Investments

Cash and cash equivalents consist of:

2020 2019Cash on hand and in banks P=28,806,738 P=9,160,249Cash equivalents 149,502,800 228,500,000

P=178,309,538 P=237,660,249

Cash in banks earn interest at the respective bank deposit rates. Cash equivalents are made for varyingperiods of up to three months depending on the immediate cash requirements of the Company and earninterest at the respective short-term investment rates.

Short-term investments amounting to P=58.50 million and P=10.00 million as of December 31, 2020 and2019, respectively have maturities of more than three months to one year from the date of acquisitionand earn interest at the prevailing market rates.

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Interest income earned from cash in banks, cash equivalents and short-term investments amounted toP=7.41 million, P=30.24 million and P=28.12 million in 2020, 2019 and 2018, respectively (see Note 16).

5. Revenue from Contracts with Customers

a. Disaggregated Revenue Information

The Company derives revenue from real estate sales over time in different product types. Thedisaggregation of each sources of revenue from contracts with customers are as follows:

Type of Product 2020 2019 2018High-rise condominium units P=239,490,023 P=489,140,244 P=380,676,557Parking slots and others 14,060,469 24,412,189 33,833,273Total P=253,550,492 P=513,552,433 P=414,509,830

Real estate sales of the Company pertain to sale of properties within Metro Manila for the yearsended December 31, 2020, 2019 and 2018. All of the Company’s real estate sales are revenue fromcontracts with customers recognized over time. In 2020, 2019 and 2018, sales for real estateproperties arose from contracts with external buyers. There were no intercompanysales/transactions made on the said years.

Contract Balances

2020 2019Installment contracts receivable P=1,765,893 P=707,509Contract asset

Current 45,757,086 62,223,947Noncurrent 362,442,313 405,852,058

Contract liabilitiesCurrent 74,415,683 68,011,239Noncurrent 50,931,630 63,993,337

Installment contracts receivable arise from sales of real estate properties and are collectible inmonthly installments for periods ranging from one (1) to ten (10) years which bears monthlyinterest rates of 0.92% to 1.46% in 2020 and 2019 computed on the diminishing balance.

The Company, CI, and CDC entered into a contract of guaranty under Retail Guaranty Line withHome Guaranty Corporation (HGC). The amount of installment contracts receivable enrolled andrenewed by the Company amounted to P=293.00 million and P=454.00 million in 2020 and 2019,respectively. The Company paid a guaranty premium of 1.00% based on the outstanding principalbalances of the receivable/s enrolled (see Note 14).

Contract assets represent the right to consideration that was already delivered by the Company inexcess of the amount recognized as installment contracts receivable. This is reclassified asinstallment contracts receivable when the monthly amortization of the buyer is already due forcollection.

In September 2019, PIC issued additional guidance to the real estate industry on the implementationof PFRS 15, including guidance on the recording of the difference between the considerationreceived from the buyer and the transferred goods to the buyer (i.e., measured based onpercentage-of-completion). The PIC allowed real estate companies to recognize the difference aseither a contract asset or unbilled receivable. If presented as a contract asset, the disclosures

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required under PFRS 15 should be complied with. Otherwise, the disclosures required underPFRS 9 should be provided.

The Company opted to retain its existing policy of recording the difference between theconsideration received from the buyer and the transferred goods to the buyer as contract asset.

Interest income earned from installment contracts receivable and contract assets amounted toP=70.13 million, P=69.19 million and P=55.91 million in 2020, 2019 and 2018, respectively(see Note 16).

Contract liabilities amounting to P=125.35 million and P=132.00 million as of 2020 and 2019,respectively, consist of collections from real estate buyers which have not reached the equitythreshold to qualify for revenue recognition and excess of collections over the goods and servicestransferred by the Company based on percentage of completion. Revenue included in the contractliability is recognized based on the movement of the percentage of completion. Contract liabilitiesamounting to P=48.58 million and P=95.79 million were recognized as revenue in 2020 and 2019,respectively.

Movement in contract liabilities in 2020 and 2019 was recognized as income based on thepercentage of completion of the ongoing projects.

b. Performance obligations

Information about the Company’s performance obligations are summarized below:

Real estate salesThe Company entered into contracts to sell with one identified performance obligation which is thesale of the real estate unit together with the services to transfer the title to the buyer upon fullpayment of contract price. The amount of consideration indicated in the contract to sell is fixed andhas no variable consideration.

The sale of real estate unit covers condominium unit and the Company concluded that there is oneperformance obligation in each of the contracts. The Company recognizes revenue from the sale ofthese real estate projects under pre-completed contract over time during the course of theconstruction.

Payment commences upon signing of the contract to sell and the consideration is payable in cashor under various financing schemes entered with the buyer. The financing scheme would includedown payment of generally 5% to 10% of the contract price with the remaining balance payablethrough in-house financing which ranges from one (1) month to ten (10) years with fixed monthlypayment. The amount due for collection under the amortization schedule for each of the buyer doesnot necessarily coincide with the progress of construction, which results to either a contract assetor contract liability.

In order to cope with the current trend in the real estate industry, the Company offered to customersthe “installment down payment” scheme starting 2020 wherein certain projects were offered with18 to 24 months to pay the corresponding down payment. The new scheme introduced by theCompany resulted to sales with percentage of collection lower than 10%. The Company recordsthese collections as “Customers’ deposits” under “Accounts Payable and Accrued Expenses”account in the statements of financial position.

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The transaction price allocated to the remaining performance obligations (unsatisfied or partiallysatisfied) as at December 31, 2020 and 2019 are as follows:

2020 2019Within one year P=125,504,737 P=150,070,143More than one year 102,244,185 166,392,450

P=227,748,922 P=316,462,593

The remaining performance obligations expected to be recognized within one year and in morethan one year relate to the continuous development of the Company’s real estate projects. TheCompany’s condominium units are generally completed within three to five years from start ofconstruction.

c. Cost to obtain contracts

The balances below pertain to the cost to obtain contracts as of December 31, 2020 and 2019 aspresented in the statements of financial position:

2020 2019Balance at beginning of year P=8,194,613 P=10,547,759Additions 3,915,072 6,342,120Amortization (5,578,909) (8,695,266)Balance at end of year 6,530,776 8,194,613Less noncurrent portion 2,931,886 4,308,635Current portion P=3,598,890 P=3,885,978

6. Other Receivables

Other receivables consist of:

2020 2019Advances to customers P=1,160,192 P=1,095,472Advances to condominium corporations 917,501 627,169Retention (Note 21) 810,000 710,000Accrued interest 300,048 563,692Rent receivable 269,499 –Others 165,573 119,571

3,622,813 3,115,904Less noncurrent portion 1,406,160 1,315,259Current portion P=2,216,653 P=1,800,645

Advances to customers are receivables of the Company for the real estate property taxes of soldcondominium units initially paid by the Company. Advances to condominium corporations pertain todisbursements that are collectible from condominium corporations. Retention pertains to the amountheld on cash sale of real estate properties. Accrued interest pertains to interest income earned as ofDecember 31 but not yet received by the Company. Rent receivable arose from the investmentproperties rented-out under non-cancellable long-term operating lease contracts (see Note 9). Otherreceivables include receivables from buyers relating to registration of title and other expenses initiallypaid by the Company on behalf of the buyers and employees’ advances.

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7. Financial Assets at FVOCI

Financial Assets at FVOCI consist of investments in quoted equity securities amounting toP=0.49 million as of December 31, 2020 and 2019, in which the fair values were determined based onpublished prices in the active market.

The movements in “Unrealized fair value change on financial assets at FVOCI” account presented inthe equity section of the statements of financial position are as follows:

2020 2019Balances at beginning of year P=392,077 P=821,235Changes in fair value 6,386 (429,158)Balances at end of year P=398,463 P=392,077

In 2019, the Company sold shares of stock with listed corporations recorded under “Financial Assetsat FVOCI” resulting to a gain on sale amounting to P=0.48 million (see Note 18).

8. Real Estate Properties for Sale and Real Estate Properties Held for Future Development

Real estate properties for saleReal estate properties for sale consists of costs incurred in the development of condominium units andresidential houses for sale.

The movements in real estate properties for sale are as follows:

2020 2019Balances at beginning of year P=1,005,860,529 P=772,012,891Construction/development costs incurred 249,120,524 518,635,938Cost of real estate sales (152,154,183) (291,124,974)Borrowing costs capitalized (Notes 12 and 17) − 6,602,142Transfer to real estate properties held for future

development – (323,172)Other adjustments - net 35,600,797 57,704Balances at end of year P=1,138,427,667 P=1,005,860,529

Real estate properties for sale account includes capitalized borrowing costs incurred during each yearin connection with the development of the properties (see Notes 12 and 17). The average capitalizationrate used to determine the amount of borrowing costs eligible for capitalization is 3.61% inDecember 31, 2019. No interest was capitalized in 2020.

Other adjustments include realized deemed cost adjustment and the recognition of repossessed realestate properties measured at fair value less cost to sell at the date of repossession.

Real estate properties held for future developmentReal estate properties held for future development include land properties reserved by the Company forits future condominium projects.

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Movements in real estate properties held for future development are as follows:

2020 2019Balances at beginning of year P=491,809,557 P=496,348,473Additions 2,547,375 2,635,904Cost adjustment (Note 12) − (7,497,992)Transfer from real estate properties for sale − 323,172Balances at end of year P=494,356,932 P=491,809,557

In January 2018, the Company purchased a property along Boni Avenue, Mandaluyong City which isheld for future development. The said acquisition in 2018 resulted to an outstanding balance of contractpayable amounting to P=7.50 million which was settled in 2019 through adjustment of the cost of theproperty (see Note 12).

9. Investment Properties

Investment properties as of December 31, 2020 and 2019 represent the real estate properties for leasewhich consist of:

Land - at costBalances at beginning and end of year P=181,139,332

Building - at costCost

Balances at beginning and end of year 814,458Accumulated depreciation

Balances at beginning and end of year (814,458)Net book value –Total net book value P=181,139,332

The net book value of land includes net deemed cost adjustment amounting to P=11.83 million as ofDecember 31, 2020 and 2019. The deemed cost adjustment arose when the Company transitioned toPFRSs in 2005.

Based on the appraisal reports by SEC-accredited and independent firms of appraisers using marketdata and sales comparison approach at various dates in 2020 and 2019, appraised values of theseinvestment properties amounted to P=927.28 million and P=788.50 million as of dates of appraisal in 2020and 2019, respectively (see Note 22).

Rental agreementsThe Company entered into lease agreements for its office spaces and condominium units for lease withthe following identified performance obligations: (a) lease of space; and (b) provisioning of water andelectricity. Revenue from lease of space is recognized on a straight-line basis over the lease term whilerevenue for the remaining performance obligations are recognized when services are rendered. Thetenant is required to issue post-dated check on the monthly rental payments. In case of delay inpayments, a penalty of about 4% per annum is charged for the amount due for the duration of delay.The lease arrangement for the Company’s long-term lease transactions would typically require a tenantto pay advance rental equivalent to three (3) months and a security deposit equivalent to three (3)months rental to cover any breakages after the rental period, with the excess returned to the tenant.

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Rent income from investment properties amounted to P=5.33 million, P=6.63 million and P=3.76 millionin 2020, 2019 and 2018, respectively.

Investment properties are rented out at different rates generally for a one-year term renewable everyyear.

The Company has an existing non-cancellable operating lease contract with a domestic corporation asof December 30, 2020 which commenced in July 2018 with a lease term of five (5) years. In 2020, theCompany granted lease concessions to its lessee resulting to modifications in the lease contract. TheCompany accounted the modification to operating lease as a new lease from the effective date of themodification, considering any prepaid or accrued lease payments relating to the original lease as partof the lease payments for the new lease.

The direct operating expenses on investment properties pertaining to depreciation, real estate taxes andother expenses amounted to P=3.05 million, P=2.32 million and P=0.57 million in 2020, 2019 and 2018,respectively (see Note 14).

The future minimum lease payments for these lease agreements are as follows:

2020 2019Not later than one year P=1,959,259 P=1,865,959Later than one year and not later than five years 2,584,071 4.543,330

P=4,543,330 P=6,409,289

10. Other Assets

Other current assets consist of prepaid expenses, input VAT and advances to contractors amounting toP=4.30 million and P=3.39 million as of December 31, 2020 and 2019, respectively.

Other noncurrent assets consist of:

2020 2019Unused input VAT P=26,785,714 P=26,785,714Utility deposits 778,556 824,194Rental deposit and others 925,442 925,442

P=28,489,712 P=28,535,350

The unused input VAT arose from the purchase of parcels of land in previous years which werepresented as part of “Real estate properties held for future development” account (see Note 8). Utilitydeposits pertain to water and electricity deposits by the Company. Rental deposits and others pertain todeposits from lease contracts and advances made by the Company for the contractors’ supplyrequirements.

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11. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of:

2020 2019Trade payables P=22,657,220 P=22,183,340Accrued expenses:

Development costs 94,795,218 84,318,926Sick leave (Note 19) 10,134,553 11,009,739Directors’ fee (Note 21) 2,696,293 9,681,159

Customers’ deposits 4,793,568 2,509,620Dividends payable 3,116,716 2,697,222Withholding taxes payable 2,244,195 1,753,970Due to related parties (Note 21) 1,444,845 887,307Others 1,114,812 1,336,074

142,997,420 136,377,357Less noncurrent portion 12,826,411 17,834,209Current portion P=130,171,009 P=118,543,148

Trade payables consist of payables to suppliers, contractors and other counterparties. Accrued expensesrepresent various accruals of the Company for its expenses and real estate projects. Accrueddevelopment costs represent the corresponding accrued expenses for the completed condominium unitsof the Company. Customers’ deposits consist of buyers’ reservation fees, rental deposits and collecteddeposits for water and electric meters of the sold units. Other payables pertain to deferred rent incomeand employees’ payable.

The movements in dividends payable and accrued interest are as follows:

PaymentsJanuary 1, 2020 Additions Expensed Capitalized December 31, 2020

Dividends payable (Note 13) P=2,697,222 P=41,808,126 (P=41,388,632) P=– P=3,116,716Accrued interest (Note 12) – – – – –

P=2,697,222 P=41,808,126 (P=41,388,632) P=– P=3,116,716

PaymentsJanuary 1, 2019 Additions Expensed Capitalized December 31, 2019

Dividends payable (Note 13) P=2,724,300 P=56,862,709 (P=56,889,787) P=– P=2,697,222Accrued interest (Note 12) 981,278 6,602,142 (981,278)* (6,602,142) –

P=3,705,578 P=63,464,851 (P=57,871,065) (P=6,602,142) P=2,697,222*Expensed in 2018 but paid in 2019.

12. Notes and Contracts Payable

In 2020 and 2019, the Company no longer applied for a new Certificate of Permit to Offer Securitiesfor Sale. All outstanding commercial papers in 2019 have been paid to the investors on or beforeNovember 6, 2019.

Contract payable amounting to P=7.50 million as of December 31, 2018 was settled in 2019 throughadjustment of the cost of the property (see Note 8).

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No interest expense was incurred for the year 2020. Interest expense related to commercial papersamounted to P=6.60 million and P=4.51 million in 2019 and 2018, respectively (see Note 17). Capitalizedborrowing costs in real estate properties for sale amounted to P=6.60 million, and P=4.51 million in 2019and 2018, respectively (see Notes 8 and 17). The average capitalization rates used to determine theamount of borrowing cost eligible for capitalization was 3.61% in 2019 and 1.88% in 2018. Totalinterest paid amounted to P=6.60 million and P=4.51 million in 2019 and 2018, respectively.

The Company, CI, CDC and Cityplans, Incorporated (the Group) have credit lines with financialinstitutions aggregating to about P=2.30 billion and P=2.50 billion as of December 31, 2020 and 2019,respectively, which are available for drawing by any of the companies within the Group. No loans wereavailed by the Group from the credit line as of December 31, 2020 and 2019.

The Company has no specific credit lines with financial institutions as of December 31, 2020 and 2019.

The carrying values of CDC’s investment properties and real estate properties for sale amounting toP=146.67 million and P=50.48 million, respectively, can be used as collaterals for the Group’s credit lines.

13. Equity

The Company registered 175,000,000 shares with the SEC on April 21, 1989 with an initial offer priceof P=1.00. On December 13, 1999, the issued and outstanding capital stock of the Company was listedin the Philippine Stock Exchange after the initial public offering on November 29, 1999. As ofDecember 31, 2020 and 2019, the Company has 1,431,785,284 shares held by 756 and 762 equityholders, respectively.

The following table summarizes the authorized and outstanding shares of capital stock:

2020 2019 2018Authorized common stock -

P=1.00 par value 1,435,000,000 1,435,000,000 1,435,000,000Issued and outstanding

Beginning of year 1,431,785,284 1,363,605,378 1,298,672,140Stock dividends – 68,179,906 64,933,238End of year 1,431,785,284 1,431,785,284 1,363,605,378

In a special meeting held on August 20, 2020, the Board of Directors of the Company approved thedeclaration of cash dividends to stockholders of record as of September 18, 2020 which was paid lastOctober 14, 2020. The cash dividends were taken from the unappropriated retained earnings of theCompany as of December 31, 2019.

No stock dividends declared for the year 2020.

Dividends declared and issued/paid by the Company in 2020, 2019 and 2018 follows:

DividendsBoard Approval

DateStockholders’

Approval Date Per ShareStockholders of

Record Date Date Issued/PaidCash August 20, 2020 − P=0.0292 September 18, 2020 October 14, 2020

June 7, 2019 − 0.0417 June 24, 2019 July 5, 2019May 21, 2018 − 0.0294 June 04, 2018 June 20, 2018

Stock April 29, 2019 June 11, 2019 5.00% July 11, 2019 August 6, 2019May 9, 2018 June 13, 2018 5.00% July 13, 2018 August 8, 2018

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As of December 31, 2020 and 2019, the unappropriated retained earnings include the impact of theremaining balance of deemed cost adjustment of investment properties amounting toP=11.83 million, net of related deferred tax of P=5.07 million, which arose when the Companytransitioned to PFRSs in 2005. This amount has yet to be realized through sales. The balance ofunappropriated retained earnings is restricted for the payment of dividends to the extent of thebalance of the deemed cost adjustment.

The balance of retained earnings is restricted for the payment of dividends to the extent of thefollowing:

2020 2019Deemed cost adjustment P=11,825,377 P=11,825,377Fair value adjustment arising from repossessed

inventories (5,526,199) 2,851,301Deferred income tax assets (Note 20) 6,308,197 16,558,290

P=12,607,375 P=31,234,968

14. Operating Expenses

Operating expenses consist of:

2020 2019 2018Personnel (Note 15) P=35,754,573 P=53,213,124 P=44,993,053Taxes and licenses 12,496,369 14,599,111 13,083,524Professional fees 5,024,502 15,207,653 9,332,325Insurance (Note 5) 2,438,574 5,191,642 4,541,325Repairs and maintenance 1,705,792 1,968,966 1,443,000Brokers’ commission 977,419 1,419,583 1,181,899Rent expense 829,064 947,262 1,011,536Outside services 757,523 1,334,042 2,973,391Advertising and promotions 607,439 823,217 1,456,975Membership dues 537,580 1,392,809 2,780,834Postage, telephone and telegraph 501,639 605,539 606,355Power, light and water 423,050 874,318 908,607Transportation 164,338 194,838 190,656Stationery and office supplies 96,750 132,235 227,124Others 3,135,088 2,362,115 2,508,050

P=65,449,700 P=100,266,454 P=87,238,654

Rent expense pertains to the lease payments on the short-term lease transactions entered into by theCompany.

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15. Personnel Expenses

Personnel expenses consist of:

2020 2019 2018Salaries and wages P=17,614,579 P=21,722,492 P=19,223,552Bonuses and other employee

benefits 9,887,359 18,003,720 15,567,895Commissions 5,807,046 11,931,128 8,906,965Retirement benefits cost

(Note 19) 2,445,589 1,555,784 1,294,641P=35,754,573 P=53,213,124 P=44,993,053

16. Financial Income

Financial income consists of:

2020 2019 2018Interest income from: Installment contracts

receivable and contractassets (Note 5) P=70,127,330 P=69,191,827 P=55,911,926

Cash equivalents and short-term investments (Note 4) 7,374,239 30,219,300 27,868,573

Cash in banks (Note 4) 36,132 25,009 251,267Dividend income 10,365 15,524 15,056

P=77,548,066 P=99,451,660 P=84,046,822

17. Financial Expense

Financial expense consists of:

2020 2019 2018Interest expense on notes payable

(Note 12) P=− P=6,602,142 P=4,513,092Capitalized borrowing costs

(Notes 8 and 12) − (6,602,142) (4,513,092)− − −

Finance charges and others 203,550 575,900 400,329P=203,550 P=575,900 P=400,329

18. Other Income - net

Net other income amounting to P=18.04 million, P=9.79 million and P=6.49 million in 2020, 2019 and2018, respectively, pertains to penalties for buyers’ late payments, sale of scraps, gain on sale of sharesof stock and net gains or losses on forfeiture/cancellation of sales.

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19. Employee Benefits

Under the existing regulatory framework, Republic Act No. 7641, The Philippine Retirement Pay Law,requires a provision for retirement pay to qualified private sector employees in the absence of anyretirement plan in the entity, provided, however, that the employees retirement benefit under thecollective bargaining and other agreements shall not be less than provided under the law. The law doesnot require minimum funding of the plan.

Retirement benefits costThe Company, jointly with affiliated companies, has a funded, noncontributory defined benefitretirement plan, covering all of its permanent employees. This provides for payment of benefits tocovered employees upon retirement subject to certain condition which is based on a certain percentageof the employee’s final monthly salary and the number of years of service.

The fund is administered by a third-party trustee bank under the supervision of the RetirementCommittee of the plan who is responsible for the investment strategy of the plan.

The details of net retirement benefits cost, which is included in “Personnel expenses” account(see Note 15), are as follows:

2020 2019 2018Current service cost P=2,028,202 P=1,286,506 P=985,069Net interest cost on net defined

benefit obligation 417,387 269,278 309,572Net retirement benefits cost P=2,445,589 P=1,555,784 P=1,294,641

Re-measurement loss (gain) recognized in the statements of comprehensive income comprises thefollowing:

2020 2019 2018Actuarial loss (gain) on defined

benefit obligation:Due to change in financial

assumption (P=1,884,753) P=5,362,470 (P=1,449,737)Due to experience

adjustments (2,582,759) 795,978 1,175,477Loss (gain) on plan assets

excluding amountsincluded in net interestcost 238,078 (641,517) (1,357,319)

Re-measurement loss (gain) (4,229,434) 5,516,931 (1,631,579)Tax effect (Note 20) 1,268,829 (1,655,079) 489,474

(P=2,960,605) P=3,861,852 (P=1,142,105)

The details of the net retirement benefits liability are as follows:

2020 2019Present value of defined benefit obligation P=22,533,309 P=25,388,520Fair value of plan assets (Note 21) 18,583,537 17,074,048Retirement benefits liability P=3,949,772 P=8,314,472

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Movements in net retirement benefits liability are as follows:

2020 2019Beginning balances P=8,314,472 P=3,643,820Retirement benefits cost 2,445,589 1,555,784Re-measurement loss (gain) (4,229,434) 5,516,931Contributions (Note 21) (2,580,855) (2,402,063)Ending balances P=3,949,772 P=8,314,472

Changes in present value of defined benefit obligation are as follows:

2020 2019Balances at beginning of year P=25,388,520 P=16,708,787Current service cost 2,028,202 1,286,506Interest cost on defined benefit obligation 1,274,504 1,234,779Benefits paid (1,690,405) −Actuarial loss (gain) (4,467,512) 6,158,448Balances at end of year P=22,533,309 P=25,388,520

Changes in fair value of plan assets are as follows:

2020 2019Balances at beginning of year P=17,074,048 P=13,064,967Contributions to the plan 2,580,855 2,402,063Interest included in net interest costs 857,117 965,501Benefits paid (1,690,405) −Actuarial gain (loss) excluding amount recognized

in net interest cost (238,078) 641,517Balances at end of year P=18,583,537 P=17,074,048

The major categories of plan assets of the Company with its affiliated companies as a percentage ofthe fair value of net plan assets are as follows:

2020 2019Cash and cash equivalents 54.41% 52.64%Investment properties 41.94% 43.31%Investments in equity securities 3.76% 3.88%Receivables 0.02% 0.23%Payables (0.13%) (0.06%)

100.00% 100.00%

Cash and cash equivalents consist of savings deposits and short-term time deposits with maturities ofless than 3 months. Investment properties pertain to condominium units which are held for lease andare stated at fair value (see Note 21). Investments in equity securities consist of investment in shares ofstock of listed companies. Investments in equity securities have quoted market prices in an activemarket. Receivables include loans to individuals and accrued interest income

The Company expects to contribute P=1.86 million to the retirement fund in 2021.

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The Company does not currently employ any asset-liability matching. The latest actuarial valuationreport is as of December 31, 2020. The principal assumptions used in determining retirement benefitscost for the Company’s plan as of January 1 are as follows:

2020 2019Number of employees 68 69Discount rate per annum 5.02% 7.39%Future annual increase in salary 5.00% 5.00%Mortality rate 1994 GAM* 1994 GAM*Disability rate 1952 Disability Study 1952 Disability Study*Group Annuity Mortality Table

As of December 31, 2020, the discount rate is 3.77% and the future increase in salary is 3.00%.

The defined benefit obligation is subject to several key assumptions. The sensitivity analysis has beendetermined based on reasonably possible changes of each significant assumption on the defined benefitobligation as of December 31, 2020 and 2019, assuming all other assumptions were held constant.

Increase (decrease)Increase (decrease) in

defined benefit obligationin basis points (bps) 2020 2019

Discount rate +0.50% (P=1,176,255) (P=1,358,818)-0.50% 1,307,390 1,514,240

Salary increase rate +1.00% 2,688,131 3,096,569-1.00% (2,222,965) (2,550,139)

Shown below is the maturity analysis of the undiscounted expected benefit payments as ofDecember 31, 2020:

Plan year No. of Retirees Total BenefitMore than 1 year to 5 years 2 P=6,700,593More than 5 years to 10 years 4 15,233,246More than 10 years to 15 years 4 9,811,764More than 15 years to 20 years 2 7,312,304More than 20 years 45 110,984,586

57 P=150,042,493

The average duration of the defined benefit obligation as of December 31, 2020 is 21 years.

Accrued sick leaveEmployees are entitled to paid sick leave of 15 days per year of service after issuance of regularappointment, computed at 1.25 days per month of service, enjoyable only after one year of regularservice. Unused sick leaves are cumulative and convertible to cash based on the employee’s salary atthe time that the employee is leaving the Company. Accrued sick leave, presented under “Accountspayable and accrued expenses - noncurrent portion” account, amounted to P=10.13 million andP=11.01 million as of December 31, 2020 and 2019, respectively (see Note 11).

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20. Income Taxes

a. Provision for (benefit from) income tax consists of:

2020 2019 2018Current P=21,035,552 P=53,790,311 P=44,661,424Deferred 9,589,130 1,915,724 (523)

30,624,682 55,706,035 44,660,901Final tax on interest income 1,482,074 6,048,862 5,623,968

P=32,106,756 P=61,754,897 P=50,284,869

b. The components of net deferred income tax assets (liabilities) as of December 31 are as follows:

2020 2019Deferred income taxes recognized in profit or loss:

Deferred income tax assets on:Accrued expenses P=3,849,254 P=6,207,269

Difference between tax basis and book basisof accounting for real estate transactions 1,369,997 9,233,556

Unamortized past service cost 1,011,741 1,028,426Unearned revenue 77,205 89,039

6,308,197 16,558,290Deferred income tax liabilities on: Deemed cost adjustment in real estate

properties (Notes 9 and 13) (5,068,019) (5,068,019)Capitalized borrowing costs (3,131,251) (3,333,642)Cost to obtain contract (Note 5) (1,959,233) (2,458,384)

Accumulated excess contributions overretirement benefits cost (1,531,211) (1,490,632)

(11,689,714) (12,350,677)(5,381,517) 4,207,613

Deferred income tax asset recognized in othercomprehensive income - actuarial losson defined benefit plan 2,716,144 3,984,973

Net deferred income tax assets (liabilities) (P=2,665,373) P=8,192,586

c. The reconciliation of income tax computed at statutory tax rate to the provision for income tax follows:

2020 2019 2018Income tax at statutory tax rate P=40,998,041 P=71,238,607 P=59,996,304Adjustments to income tax

resulting from: Interest income subjected

to final tax (2,223,111) (9,073,293) (8,435,952)Tax-exempt interest income (7,993,537) (8,389,846) (6,870,596)Final tax on interest income 1,482,074 6,048,862 5,623,968Nontaxable income (153,602) – –

(Forward)

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2020 2019 2018Nondeductible expense P=– P=1,935,225 P=1,141,790

Net income entitled toincome tax holiday – – (1,166,128)

Others (3,109) (4,658) (4,517)Provision for income tax P=32,106,756 P=61,754,897 P=50,284,869

d. On February 3, 2021, the House of Representatives and the Senate have ratified the BicameralCommittee’s version of the proposed “Corporate Recovery and Tax Incentives for Enterprises Act”or “CREATE”, reconciling the disagreeing provisions of Senate Bill No. 1357 and House BillNo. 4157.

The said Act aims to:1. Improve the equity and efficiency of the corporate tax system by lowering the rate, widening

the tax base, and reducing tax distortions and leakages;2. Develop, subject to the provisions of this Act, a more responsive and globally-competitive tax

incentives regime that is performance-based, targeted, time-bound, and transparent;3. Provide support to businesses in their recovery from unforeseen events such as an outbreak of

communicable diseases or a global pandemic and strengthen the nation’s capability for similarcircumstances in the future; and

4. Create a more equitable tax incentive system that will allow for inclusive growth and generationof jobs and opportunities in all the regions of the country and ensure access and ease in thegrant of these incentives especially for applicants in least developed areas.

The enrolled bill was submitted to the President on February 24, 2021 for his approval and uponreceipt of the bill, the President may do any of the following:1. Sign the enrolled bill without vetoing any line or item therein;2. Sign the enrolled bill with line or item veto which veto may be overridden by Congress; or3. Inaction within 30 days from receipt which would result to the automatic approval of the

enrolled bill as it is.

Once signed, the measure is set to take effect 15 days after its complete publication in the OfficialGazette or in a newspaper of general circulation.

Among the salient provisions of the aforementioned Bicameral version is the reduction in thecorporate income tax rate as follows:

Domestic CorporationFor total assets of a Company of P=100 million and below: 20% - if their net taxable income is P=5 million and below 25% - if their net taxable income is more than P=5 million

For a company with total assets of more than P=100 million, corporate income tax rate is 25% basedon net taxable income. Total assets are exclusive of the value of the land on which the particularcompany’s office, plant, and equipment are situated.

The target effectivity date is on July 1, 2020.

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For the allowable deduction for interest expense reduced by a percentage (currently at 33%) ofinterest income subjected to final tax, the following rates shall apply:

20% interest reduction if the applicable corporate tax rate is 25% 0% interest reduction if the applicable corporate tax rate is 20%

Also, a reduction of minimum corporate income tax from 2% to 1% for a period of three years(i.e., July 1, 2020 until June 30, 2023).

As of March 24, 2021, the said bill has not been passed into law.

21. Related Party Transactions

Enterprises and individuals that directly, or indirectly through one or more intermediaries, control orare controlled by or under common control with the Company, including holding companies,subsidiaries and fellow subsidiaries, are related parties of the Company. Associates and individualsowning, directly or indirectly, an interest in the voting power of the Company that gives themsignificant influence over the enterprise, key management personnel, including directors and officersof the Company and close members of the family of these individuals, and companies associated withthese individuals also constitute related parties. In considering each possible related entity relationship,attention is directed to the substance of the relationship and not merely the legal form.

The Company discloses the nature of the related party relationship and information about thetransactions and outstanding balances necessary for an understanding of the potential effect of therelationship on the financial statements, including, as a minimum, the amount of outstanding balancesand its terms and conditions including whether they are secured, and the nature of the consideration tobe provided in settlement. The Company, in the normal course of business, has transactions and accountbalances with related parties consisting mainly of the following:

Outstanding BalancesAmount of trpansactions Receivable (Note 6) Payable (Note 11)

Nature of Transaction 2020 2019 2020 2019 2020 2019Terms andconditions

Ultimate ParentCompany (CI)Sharing of expenses

charged to the Company (b) (P=843,516) (P=388,309) P=– P=– P=1,444,845 P=601,329

30-day, unsecured,non-interest bearingto be settled in cash;

Parent Company (CDC)Sharing of expenses

chargedby (to) the Company(b) 285,978 (464,440) – – – 285,978

30-day, unsecured,non-interest bearingto be settled in cash;

Affiliate (CPI)

Sharing of expenses chargedto the Company (b) – (186,765) – – – –

30-day, unsecured,non-interest bearingto be settled in cash

Sale of real estatepropertyunder pre-completioncontracts (a) – – 150,000 150,000 – –

To be settled in cashupon turnover;

interest-bearing(Note 5)

(Forward)

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Outstanding BalancesAmount of trpansactions Receivable (Note 6) Payable (Note 11)

Retirement planContributions to the plan(c) P=2,580,855 P=2,402,063 P=– P=– P=– P=– Settled in cash

Key managementpersonnelSalaries and other

compensation (d) 4,263,952 5,968,894 – – 2,696,293 9,681,159 Settled in cash

BODShares of stock (e) 445,231 2,644,218 – – – –

Pertains to47,810,670 and

47,365,439 commonshares at P=1 parvalue per share

Total P=150,000 P=150,000 P=4,141,138 P=10,568,466

a. In 2016, the Company sold condominium units of an on-going real estate project to CPI with acontract price amounting to P=19.42 million (realized as revenue based on percentage ofcompletion). Retention for this sale transaction amounted to P=0.15 million as of December 31, 2020and 2019 (see Note 6).

b. The Company has various shared expenses with other affiliates pertaining to general andadministrative expenses such as salaries, transportation, association dues, professional fees andrent. Outstanding balances are recorded as due from related parties under “Other receivables” and“Accounts payable and accrued expenses” account in the statements of financial position.

c. The Company, jointly with affiliated companies under common control, has a trust fund for theretirement plan of their employees. The trust fund is being maintained by a third-party trustee bankunder the supervision of the Retirement Committee of the plan who is responsible for theinvestment strategy of the plan. The Company’s share in the Group’s fair value of plan assetsamounted to P=18.58 million and P=17.07 million as of December 31, 2020 and 2019, respectively.The Company’s share in the carrying value of plan assets is equivalent to its share in the fair value.

The major categories of plan assets are cash and cash equivalents, investment properties,investments in equity securities and loans and receivables (see Note 19). Investments in equitysecurities of plan assets include investment in shares of CDC. The third-party trustee bank exercisesthe voting rights over the shares. The fair value of the investment in CDC amounted toP=4.85 million and P=4.84 million as of December 31, 2020 and 2019, respectively, with original costof P=3.40 million. Unrealized gain on changes of fair value of these investments amounted toP=1.45 million and P=1.44 million as of December 31, 2020 and 2019, respectively. Loans andreceivables of plan assets include installment contracts receivable purchased in prior years on anon-recourse basis from CDC amounting to P=0.11 million as of December 31, 2020 and 2019. Theretirement plan assets as of December 31, 2020 and 2019 include fair value of investment propertiesheld for lease amounting to P=54.04 million, which was purchased from CDC in 2013. The sale wasconducted in the normal course of business and was measured at current selling price and settled incash.

Contributions to the fund amounted to P=2.58 million and P=2.40 million in 2020 and 2019,respectively (see Note 19).

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d. Compensation of key management personnel are as follows:

2020 2019 2018Salaries P=2,107,670 P=2,228,228 P=1,903,657Bonuses 363,171 568,682 491,577Other benefits 1,793,111 3,171,984 3,704,322

P=4,263,952 P=5,968,894 P=6,099,556

Other benefits consist of incentives, retirement benefits and performance bonuses.

The Company has no standard arrangements with regard to remuneration of its directors. In 2020,2019 and 2018, the BOD received a total of P=5.33 million, P=8.41 million and P=5.40 million,respectively. Moreover, the Company has no standard arrangement with regard to the remunerationof its existing officers aside from the compensation received or any other arrangements in theemployment contracts and compensatory plan. The Company does not have any arrangements forstock warrants or options offered to its employees.

e. Shares of stock of the Company held by members of the BOD aggregated to P=47.81 million andP=47.37 million par value as of December 31, 2020 and 2019, respectively.

22. Financial Instruments and Fair Value Measurement

Financial Risk Management Objectives and PoliciesThe Company’s principal financial instruments comprise cash and cash equivalents and short-terminvestments. The main purpose of these financial instruments is to finance the Company’s operations.The Company’s other financial instruments consist of financial assets at FVOCI, which are held forinvesting purposes. The Company has various other financial instruments such as installment contractsreceivable, contract assets, other receivables and accounts payable and accrued expenses which arisedirectly from its operations.

It is, and has been throughout the year under review, the Company’s policy that no trading in financialinstruments shall be undertaken.

The main risks arising from the Company’s financial instruments are market risk (i.e., cash flow interestrate risk, and equity price risk), credit risk, and liquidity risk. The BOD reviews and approves policiesfor managing these risks and they are summarized below.

Market riskCash flow interest rate riskCash flow interest rate risk is the risk that the fair value or future cash flows of a financial instrumentwill fluctuate because of changes in market interest rates. The Company’s exposure to the risk ofchanges in market interest rates relates primarily to the Company’s notes payable, with repriced interestrates.

The Company’s policy in addressing volatility in interest rates includes maximizing the use of operatingcash flows to be able to fulfill principal and interest obligations even in periods of rising interest rates.

There is no impact on the Company’s equity other than those already affecting income before incometax.

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Equity price riskEquity price risk is the risk that the fair values of investments in equity securities will decrease as aresult of changes in the market values of individual shares of stock. The Company is exposed to equityprice risk because of investments held by the Company classified as financial assets at FVOCI in thestatements of financial position. The Company employs the service of a third-party stockbroker tomanage its investments in shares of stock.

The following table demonstrates the sensitivity analysis of the Company’s equity to a reasonablypossible change in equity price based on forecasted and average movements of equity prices (with allother variables held constant):

Change inequity price Effect on equity

2020 +/-0.0437 +/-P=21,6012019 +/-0.0979 +/-P=47,766

Credit riskCredit risk arises when the Company will incur a loss because its buyers, clients, or counterparties failto discharge their obligations. The Company is exposed to credit risk from its operating activities(primarily trade receivables) and from its financing activities, including deposits with banks andfinancial institutions and other financial instruments.

The Company trades only with recognized, creditworthy third parties. It is the Company’s policy thatall buyers who wish to trade on credit terms are subject to credit verification procedures. In addition,receivable balances are monitored on an on-going basis with the objective that the Company’s exposureto bad debts is not significant. The risk is further mitigated because the Company holds the title to thereal estate properties with outstanding installment contracts receivable balance and the Company canrepossess such real estate properties upon default of the buyer in paying the outstanding balance. TheCompany’s policy is to enter into transactions with a diversity of credit-worthy parties to mitigate anysignificant concentration of credit risk. There are no significant concentrations of credit risk within theCompany.

The tables below show the Company’s exposure to credit risk for the components of the statements offinancial position. The exposure as of December 31, 2020 and 2019 is shown at gross, before takingthe effect of mitigation through the use of collateral agreements and other credit enhancements, and themaximum exposure at net, after taking the effect of mitigation through the use of collateral agreementsand other credit enhancements.

December 31, 2020:

Fair value ofFinancial

effect ofGross maximum collaterals/credit collaterals/credit

exposure enhancements Net exposure EnhancementsFinancial assets at amortized cost

Cash and cash equivalents* P=178,293,538 P=– P=178,293,538 P=–Short-term investments 58,500,000 – 58,500,000 –Installment contracts receivable 1,765,893 114,769,005 – 1,765,893

Refundable deposits 993,121 – 993,121 –Other receivables:

Advances to customers 1,160,192 – 1,160,192 – Advances to condominium

corporations 917,501 – 917,501 –

(Forward)

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Fair value ofFinancial

effect ofGross maximum collaterals/credit collaterals/credit

exposure enhancements Net exposure EnhancementsRetention P=810,000 P=– P=810,000 P=–Accrued interest 300,048 – 300,048 –Rent receivable 269,499 – 269,499 –Others 165,573 – 165,573 –

Contract asset 408,199,399 1,133,210,791 – 408,199,399Total credit risk exposure P=651,374,764 P=1,247,979,796 P=241,409,472 P=409,965,292*Excluding cash on hand amounting to P=16,000.

December 31, 2019:

Fair value ofFinancialeffect of

Gross maximum collaterals/credit collaterals/creditexposure enhancements Net exposure Enhancements

Financial assets at amortized costCash and cash equivalents* P=237,644,249 P=– P=237,644,249 P=–Short-term investments 10,000,000 – 10,000,000 –

Installment contracts receivable 707,509 62,569,171 – 707,509Refundable deposits 1,038,759 – 1,038,759 –Other receivables:

Advances to customers 1,095,472 – 1,095,472 –Retention 710,000 – 710,000 –

Advances to condominiumcorporations 627,169 – 627,169 –

Accrued interest 563,692 – 563,692 – Others 119,571 – 119,571 –Contract asset 468,076,005 1,185,029,888 – 468,076,005Total credit risk exposure P=720,582,426 P=1,247,599,059 P=251,798,912 P=468,783,514*Excluding cash on hand amounting to P=16,000.

The Company has performed an ECL calculation for its financial assets at amortized cost. The ECL isa product of the probability of default, loss given default and exposure at default.

In determining the probability of default, the Company used historical default rates for the last fiveyears for the installment sales from its buyers and last two years for other receivables. The Companyapplied the possible effects of macroeconomic factors to the historical loss rate. For loss given default,the Company determined the fair value less cost of repossession of collaterals upon default is higherthan the exposure at default. Thus, no expected credit loss was recognized for the Company’sinstallment contract receivables, contract assets and other receivables from its buyer.

The Company considers its cash and cash equivalent and short-term investments as high grade sincethese are placed in financial institution of high credit standing. Accordingly, ECL relating to cash andcash equivalent and short-term investment rounds to nil.

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The Company considers other receivables from third parties and related parties as medium grade. Thirdparties are primarily managed through screening based on credit history and financial informationsubmitted. Whereas, related parties have low risk of default and have a strong capacity to meet theircontractual cash flows in the near term. The following tables summarize the aging analysis ofreceivables on which expected credit loss rate was applied:

December 31, 2020:

Contractasset

Days past due

CurrentMore than

one yearLess than

30 days 30-60 days 61-90 days Over 90 days TotalInstallment contracts

receivable P=– P=– P=– P=1,543,077 P=163,276 P=59,540 P=– P=1,765,893Contract asset 408,199,399 – – – – – – 408,199,399Refundable deposits – 993,121 – – – – – 993,121Other receivables:

Advances to customers – 960,312 4,841 – – 57,141 137,898 1,160,192Advances to

condominiumcorporations – 326,182 591,319 – – – – 917,501

Retention – – 810,000 – – – – 810,000Accrued interest – 300,048 – – – – – 300,048Rent receivable – 269,499 – – – – – 269,499Others – 165,573 – – – – – 165,573

P=408,199,399 P=3,014,735 P=1,406,160 P=1,543,077 P=163,276 P=116,681 P=137,898 P=414,581,226

December 31, 2019:

Contract asset

Days past due

CurrentMore than

one yearLess than

30 days 30-60 days 61-90 days Over 90 days TotalInstallment contracts

receivable P=– P=– P=– P=488,467 P=142,962 P=– P=76,080 P=707,509Contract asset 468,076,005 – – – – – – 468,076,005Refundable deposits – 1,038,759 – – – – – 1,038,759Other receivables:

Advances to customers – 980,367 – – – 33,919 81,186 1,095,472Retention – – 710,000 – – – – 710,000Advances to

condominiumcorporations – 39,741 587,428 – – – – 627,169

Accrued interest – 563,692 – – – – – 563,692Others – 119,571 – – – – – 119,571

P=468,076,005 P=2,742,130 P=1,297,428 P=488,467 P=142,962 P=33,919 P=157,266 P=472,938,177

The tables below show the credit quality by class of financial assets based on the Company’s creditrating system.

December 31, 2020:

MediumHigh Grade* Grade** Total

Financial assets at amortized costCash and cash equivalents, excluding cash on hand P=178,293,538 P=– P=178,293,538Short-term investments 58,500,000 – 58,500,000Installment contracts receivable – 1,765,893 1,765,893Contract assets – 408,199,399 408,199,399Refundable deposits – 993,121 993,121Other receivables:

Advances to customers – 1,160,192 1,160,192Advances to condominium corporations – 917,501 917,501Retention – 810,000 810,000Accrued interest 300,048 – 300,048Rent receivable – 269,499` 269,499Others – 165,573 165,573

P=237,093,586 P=414,281,178 P=651,374,764*High Grade - financial assets with reputable counterparties and which management believes as reasonably assured as recoverable.**Medium Grade - financial assets for which there is low risk of default of counterparties.

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*SGVFSM006891*

December 31, 2019:

MediumHigh Grade* Grade** Total

Financial assets at amortized costCash and cash equivalents, excluding cash on hand P=237,644,249 P=– P=237,644,249Short-term investments 10,000,000 – 10,000,000Installment contracts receivable – 707,509 707,509Contract assets – 468,076,005 468,076,005Refundable deposits – 1,038,759 1,038,759Other receivables:

Advances to customers – 1,095,472 1,095,472Retention – 710,000 710,000Advances to condominium corporations – 627,169 627,169Accrued interest 563,692 – 563,692Others – 119,571 119,571

P=248,207,941 P=472,374,485 P=720,582,246*High Grade - financial assets with reputable counterparties and which management believes as reasonably assured as recoverable.**Medium Grade - financial assets for which there is low risk of default of counterparties.

Liquidity riskLiquidity risk is defined as the risk that the Company would not be able to settle or meet its obligationson time or at a reasonable price.

The Company’s objective is to maintain a balance between continuity of funding and flexibility throughthe use of commercial papers.

The tables below summarize the maturity analysis of the Company’s financial assets held for managingliquidity and financial liabilities based on contractual undiscounted payments:

December 31, 2020:1-30 days 31-90 days 91-180 days 181-365 days Above 1 year Total

Financial Assets Cash and cash equivalents P=149,309,538 P=29,000,000 P=– P=– P=– P=178,309,538 Short-term investments – 58,500,000 – – – 58,500,000 Installment contracts receivable 1,543,077 222,816 – – – 1,765,893 Refundable deposits – – – – 993,121 993,121 Other receivables 1,508,755 492,338 74,093 141,467 1,406,160 3,622,813 Financial assets at FVOCI – – – – 494,298 494,298Contract assets 4,729,988 7,748,234 11,658,808 21,620,056 362,442,313 408,199,399

157,091,358 95,963,388 11,732,901 21,761,523 365,335,892 651,885,062Financial Liabilities Accounts payable and accrued expenses* 125,250,475 8,687 13,031 26,062 10,661,402 135,959,657Liquidity position P=31,840,883 P=95,954,701 P=11,719,870 P=21,735,461 P=354,674,490 P=515,925,405* Excludes customers’ deposits amounting to P=4,793,568 and statutory liabilities amounting to P=2,244,195.

December 31, 2019:1-30 days 31-90 days 91-180 days 181-365 days Above 1 year Total

Financial Assets Cash and cash equivalents P=190,660,249 P=47,000,000 P=– P=– P=– P=237,660,249 Short-term investments – 10,000,000 – – – 10,000,000 Installment contracts receivable 488,467 142,962 76,080 – – 707,509 Refundable deposits – – – – 1,038,759 1,038,759 Other receivables 1,130,874 612,598 27,574 29,599 1,315,259 3,115,904 Financial assets at FVOCI – – – – 487,912 487,912Contract assets 6,021,211 10,155,915 15,548,978 30,497,843 405,852,058 468,076,005

198,300,801 67,911,475 15,652,632 30,527,442 408,693,988 721,086,338Financial Liabilities Accounts payable and accrued expenses* 93,659,255 11,609 9,860,584 11,623,968 15,519,718 130,675,134

93,659,255 11,609 9,860,584 11,623,968 15,519,718 130,675,134Liquidity position P=104,641,546 P=67,899,866 P=5,792,048 P=18,903,474 P=393,174,270 P=590,411,204* Excludes customers’ deposits amounting to P=2,509,620 and statutory liabilities amounting to P=1,753,970.

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*SGVFSM006891*

Fair ValuesThe tables below provide fair value hierarchy of the Company’s financial assets, financial liabilitiesand investment properties, other than those with carrying amounts which are reasonable approximationsof fair values:

As of December 31, 2020:Fair value

Level 1 Level 2 Level 3Assets measured at fair value:

Financial assets at FVOCI P=494,298 P=– P=–Asset for which fair values are disclosed:

Investment properties – – 927,276,000

As of December 31, 2019:Fair value

Level 1 Level 2 Level 3Assets measured at fair value:

Financial assets at FVOCI P=487,912 P=– P=–Asset for which fair values are disclosed:

Investment properties – – 788,500,000

The following method and assumptions were used to estimate the fair value of each class of financialinstruments and investment properties, for which it is practicable to estimate such value.

Cash and cash equivalents, short-term investments, installment contracts receivable, other receivablesand accounts payable and accrued expensesDue to the short-term nature of the transactions, the fair values of cash and cash equivalents,short-term investments, other receivables and accounts payable and accrued expenses approximate theircarrying amounts. The fair value of installment contracts receivable approximates its carrying amountas it carries interest rates that approximate the interest rate for comparable instruments in the market.

Financial Assets at FVOCIFinancial assets at FVOCI are stated at fair value based on quoted market prices.

Investment propertiesThe fair value of certain investment properties is determined using sales comparison. Sales comparisonapproach considers the sales of similar or substitute properties and other related market data had theinvestment properties been transacted in the market. The significant unobservable inputs used indetermining the fair value are the sales price per square meter of similar or substitute property, location,size, shape of lot and the highest and best use.

Another method used in determining the fair value of other land properties is based on the market dataapproach. The value of land is based on sales and listings of comparable property registered within thevicinity. This requires adjustments of comparable property by reducing reasonable comparative salesand listings to a common denominator by adjusting the difference between the subject property andthose actual sales and listings regarded as comparable. The comparison is premised on the factors oflocation; size and shape of the lot; time element and others.

The fair value of the investment properties as of December 31, 2020 and 2019 represents the highestand best use of the said properties which is the same with its current use.

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23. Capital Management

The primary objective of the Company’s capital management is to ensure that it maintains a strongcredit and healthy capital ratios in order to support its business and maximize shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economicconditions. It monitors its use of capital using leverage ratios on both gross debt and debt coveragebasis. Debt consists of short-term debt. Debt coverage includes short-term debt less cash and cashequivalents and short-term investments. The Company considers as capital the total equity excludingthe accumulated other comprehensive items.

As of December 31, 2020 and 2019, the Company has the following ratios:

2020 2019Notes and contracts payable P=– P=–Total equity P=2,228,388,515 P=2,162,676,268Add (less):

Net changes in fair values of financial assetsat FVOCI (398,463) (392,077)

Accumulated re-measurement ondefined benefit plan 6,337,668 9,298,273

Capital P=2,234,327,720 P=2,171,582,464Debt-to-capital ratio 0.00:1 0.00:1

2020 2019Cash and cash equivalents P=178,309,538 P=237,660,249Short-term investments 58,500,000 10,000,000Notes and contracts payable – –Debt coverage P=236,809,538 P=247,660,249

As of December 31, 2020 and 2019, the Company has no externally imposed capital requirements.

In accordance with the rule on Minimum Public Ownership issued by the Philippine Stock Exchange(PSE) requiring listed companies to maintain a 10% public float at all times, the total number of sharesowned by the public as of December 31, 2020 and 2019 are 227,316,830 shares which areapproximately 15.88% of the total number issued and outstanding shares of the Company.

On December 13, 1999, the PSE approved the listing of the Company’s common shares totaling175,000,000 shares. The shares were initially issued at an offer price of P=1.00 per share.

After listing in 1999, there had been subsequent issuances covering a total of 1,431,785,284 shares.

Below is the summary of the Company’s track record of registration of securities with the SEC andPSE as at December 31:

Number ofShares Registered

Number of holders ofsecurities as of yearend

December 31, 2018 1,363,605,378 766Add/(Deduct) Movement 68,179,906 (4)December 31, 2019 1,431,785,284 762Add/(Deduct) Movement – (6)December 31, 2020 1,431,785,284 756

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24. Basic/Diluted Earnings Per Share

Basic/diluted earnings per share amounts were computed as follows:

2020 2019 2018Net income P=104,553,382 P=175,707,125 P=149,702,816Weighted average number of

outstanding shares 1,431,785,284 1,431,785,284 1,431,785,284*Basic/diluted earnings per share P=0.07 P=0.12 P=0.10*After retroactive effect of 5% stock dividends in 2019.

The Company has no potential dilutive common shares as of December 31, 2020, 2019 and 2018. Thus,the basic and diluted earnings per share are the same as of those dates.

25. Business Segments

The Company derives its revenues primarily from the sale and lease of real estate properties. These arethe operating segments classified as business groups which are consistent with the segments reportedto the BOD, its Chief Operating Decision Maker (CODM).

Segment Revenue and Expenses

2020Sales of Real Estate

PropertiesLease of Real Estate

Properties TotalRevenue:

Sales of real estate P=253,550,492 P=– P=253,550,492Financial income 77,548,066 – 77,548,066Rent income – 5,331,033 5,331,033

Other income - net 18,037,980 – 18,037,980Cost of real estate sales 152,154,183 – 152,154,183Operating expenses:

Personnel 35,754,573 – 35,754,573Taxes and licenses 12,348,477 147,892 12,496,369Professional fees 5,024,502 – 5,024,502Insurance 2,438,574 – 2,438,574Others 9,307,543 428,139 9,735,682

Financial expenses 203,550 – 203,550Provision for income tax 30,680,255 1,426,501 32,106,756Net income P=101,224,881 P=3,328,501 P=104,553,382




Sales of real estate P=513,552,433 P=– P=513,552,433 Financial income 99,451,660 – 99,451,660

Rent income – 6,634,429 6,634,429Other income - net 9,790,828 – 9,790,828

Cost of real estate sales 291,124,974 – 291,124,974Operating expenses:

Personnel 53,213,124 – 53,213,124Taxes and licenses 14,088,266 510,845 14,599,111

(Forward)

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*SGVFSM006891*



Properties TotalProfessional fees P=15,207,653 P=– P=15,207,653Insurance 5,191,642 – 5,191,642Others 10,246,109 1,808,815 12,054,924

Financial expenses 575,900 – 575,900Provision for income tax 60,460,466 1,294,431 61,754,897Net income P=172,686,787 P=3,020,338 P=175,707,125




Sales of real estate P=414,509,830 P=– P=414,509,830Financial income 84,046,822 – 84,046,822Rent income – 3,764,560 3,764,560Other income - net 6,486,154 – 6,486,154

Cost of real estate sales 221,180,698 – 221,180,698Operating expenses:

Personnel 44,993,053 – 44,993,053Taxes and licenses 12,890,845 192,679 13,083,524Professional fees 9,332,325 – 9,332,325Insurance 4,541,325 – 4,541,325Others 14,907,688 380,739 15,288,427

Financial expenses 400,329 – 400,329Provision for income tax 49,327,526 957,343 50,284,869Net income P=147,469,017 P=2,233,799 P=149,702,816

Segment Assets and Liabilities

December 31, 2020:

Sales of RealEstate Properties

Lease of RealEstate Properties Total

Total assets P=2,322,185,629 P=181,949,332 P=2,504,134,961Total liabilities 275,495,914 250,532 275,746,446Additions to real estate properties held for future development

(Note 8) 2,547,375 – 2,547,375

December 31, 2019:

Sales of RealEstate Properties

Lease of RealEstate Properties Total

Total assets P=2,265,225,051 P=181,949,332 P=2,447,174,383Total liabilities 284,194,574 303,541 284,498,115Additions to real estate properties held for future development

(Note 8) 2,635,904 – 2,635,904

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26. Contingencies

The Company is contingently liable for certain lawsuits or claims filed by third parties which are eitherpending decisions by the courts or are under negotiation, the outcomes of which are not presentlydeterminable. In the opinion of management and its legal counsel, the eventual liability under theselawsuits or claims, if any, will not have a material effect on the financial statements. Hence, noprovision was recognized as of December 31, 2020 and 2019.

27. Other Matters

COVID-19 OutbreakIn a move to contain the COVID-19 outbreak, on March 13, 2020, the Office of the President of thePhilippines issued a Memorandum directive to impose stringent social distancing measures in theNational Capital Region (NCR) effective March 15, 2020.

On March 16, 2020, Presidential Proclamation No. 929 was issued, declaring a State of Calamitythroughout the Philippines for a period of six (6) months and imposed an enhanced communityquarantine (ECQ) throughout the island of Luzon until April 12, 2020, which was subsequentlyextended to April 30, 2020 and further extended to May 15, 2020. After which, modified ECQ wasimplemented in Metro Manila until May 31, 2020.

Starting June 1, 2020, NCR and other parts of the Philippines were declared to be under generalcommunity quarantine (GCQ), until June 15, 2020. The GCQ was further extended untilJune 30, 2020, then again until July 15, 2020. Afterwards, the GCQ was extended until July 30, 2020.

On August 3, 2020, the President of the Philippines reverted Metro Manila, and the provinces ofLaguna, Cavite, Rizal and Bulacan to modified enhanced community quarantine from generalcommunity quarantine from August 4, 2020 until August 18, 2020. Starting August 19, 2020, MetroManila, as well as the provinces of Laguna, Cavite, Rizal, and Bulacan, returned to general communityquarantine unless earlier lifted or extended.

The COVID-19 pandemic has caused disruptions in the Company’s business activities. Further, thescale and duration of the impact of the pandemic remain uncertain as at the report date. It is not possibleto estimate the overall impact of the outbreak’s near-term and longer effects. The outbreak could havea material impact on the Company’s financial results for the rest of 2021 and even periods thereafter.As this global problem evolves, the Company will continually adapt and adjust its business modelaccording to the business environment in the areas where the Company operates, in full cooperationwith the national and local government units.

28. Supplementary Information Required Under Revenue Regulations No. 15-2010

In compliance with the requirements set forth in Revenue Regulations No. 15-2010, the information ontaxes and license fees paid or accrued for the period ended December 31, 2020 is as follows:

a. Net sales/receipts and output VAT declared in the Company’s VAT returns filed in 2020:

Net sales/receipt Output VATVatable sales P=224,972,526 P=26,996,704Exempt 98,659,116 –

P=323,631,642 P=26,996,704

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The Company does not have zero-rated sales/receipts in 2020. The Company’s net sales/receiptsare based on actual collections received, hence, may not be the same as the amountsaccrued/reflected in the “Sales of real estate properties” account in the Company’s 2020 statementof income.

The Company has exempt sale transactions pursuant to Section 109 of the 1997 Tax Code, asamended.

b. Input VAT

The following table shows the sources of input VAT claimed:

Balance at beginning of year P=3,061,762Purchases of:

Goods other than for resale 7,887,124Services lodged under other accounts 14,553,021

Total available input VAT during the year 25,501,907Less input VAT applied against output VAT

and other adjustments 22,288,357Balance at end of year P=3,213,550

c. There are no importations in 2020.

d. Details of taxes and licenses are shown below:

UnderReal Estatefor Future

Development

UnderCost of RealEstate Sales

UnderOperatingExpenses Total

Business permit and registration P=– P=– P=11,112,365 P=11,112,365Real estate property taxes 94,500 – 1,112,331 1,206,831Documentary stamps taxes – – 1,112 1,112Other taxes and licenses 788,468 149,391 270,561 1,208,420

P=882,968 P=149,391 P=12,496,369 P=13,528,728

e. Documentary stamp taxes

In 2020, the Company paid documentary stamp taxes in relation to the payment for accidentinsurance while no documentary stamp taxes for loan instruments and for shares of stock wereincurred.

f. Withholding taxes

The following are the categories of the Company’s withholding taxes in 2020:

Compensation and benefits P=3,424,926Expanded taxes 4,632,833Final taxes on cash dividends 769,469

P=8,827,228

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The outstanding balance of withholding taxes as of December 31, 2020 amounted toP=2.24 million.

g. Tax contingencies:

i. The Company has no final deficiency tax assessments as of December 31, 2020.ii. The Company has no tax cases, litigation and/or prosecution in courts or bodies outside the BIR.

*SGVFSM006891*

INDEPENDENT AUDITOR’S REPORTON SUPPLEMENTARY SCHEDULES

The Stockholders and the Board of DirectorsCity & Land Developers, Incorporated3rd Floor, Cityland Condominium 10, Tower I156 H.V. de la Costa StreetMakati City

We have audited in accordance with Philippine Standards on Auditing, the financial statements ofCity & Land Developers, Incorporated (the Company) as at December 31, 2020 and 2019 and for each ofthe three years in the period ended December 31, 2020 and have issued our report thereon datedMarch 24, 2021. Our audits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The schedules listed in the Index to the Financial Statements andSupplementary Schedules are the responsibility of the Company’s management. These schedules arepresented for purposes of complying with Revised Securities Regulation Code Rule 68 and are not part ofthe basic financial statements. These schedules have been subjected to the auditing procedures applied inthe audit of the basic financial statements and, in our opinion, fairly state, in all material respects, theinformation required to be set forth therein in relation to the basic financial statements taken as a whole.



March 24, 2021


Tel: (632) 8891 0307Fax: (632) 8819 0872ey.com/ph




CITY & LAND DEVELOPERS, INCORPORATEDINDEX TO THE FINANCIAL STATEMENTS ANDSUPPLEMENTARY SCHEDULES

Schedule I: Reconciliation of Retained Earnings Available for Dividend Declaration(Part 1, 4C; Annex 68-C)

Schedule II: Map of the relationships of the companies within the group

Schedule III: Supplementary schedules required by Annex 68-JSchedule A. Financial assetsSchedule B. Amounts receivable from directors, officers, employees, related parties and principal stockholders (other than related parties)Schedule C. Amounts receivable from related parties which are eliminated during the consolidation of financial statementsSchedule D. Long-term debtSchedule E. Indebtedness to related partiesSchedule F. Guarantees of securities of other issuersSchedule G. Capital stock

Schedule IV: Supplementary schedules of financial soundness indicators

Schedule V: Schedule of gross and net proceeds of commercial papers issued

SCHEDULE I

CITY & LAND DEVELOPERS, INCORPORATEDSUPPLEMENTARY SCHEDULE OF RETAINED EARNINGSAVAILABLE FOR DIVIDEND DECLARATIONDECEMBER 31, 2020

Retained earnings, beginning P=739,692,044Deemed cost adjustment on real estate properties, net of tax (11,825,377)Deferred income tax assets, beginning (16,558,290)Fair value adjustment arising from repossessed inventories, beginning (2,851,301)Retained earnings, as adjusted to

available for dividends declaration, beginning 708,457,076Add: Net income actually earned/realized during the year

Net income during the year closed to retained earnings 104,553,382Movement in deferred income tax assets 10,250,093Movement in fair value adjustment arising from repossessed inventories 8,377,500

123,180,975Less: Dividends declared during the year

Cash dividends 41,808,12641,808,126

Retained earnings available for dividends declaration, end P=789,829,925

SCHEDULE IICITY & LAND DEVELOPERS, INCORPORATEDMAP OF THE RELATIONSHIPS OF THE COMPANIES WITHIN THE GROUP

SCHEDULE III

CITY & LAND DEVELOPERS, INCORPORATEDSUPPLEMENTARY SCHEDULES REQUIRED BY ANNEX 68-E

SCHEDULE A. FINANCIAL ASSETS

Name of Issuing Entity and Description of Each Issue Number of Shares or PrincipalAmount of Bonds and Notes

Amount Shown in theStatement of financial

position

Value Based onMarket Quotations at

Balance Sheet Date

Income Received andAccrued

CASH AND CASH EQUIVALENTSCash on hand and in banks P=− P=28,806,738 P=− P=36,132Cash equivalents

Amalgamated Investment Bancorporation − 38,500,000 − 522,167China Bank Savings − − − 698,570Citysavings Bank − 43,500,000 − 246,524China Trust Bank Corp. − − − 38,224Malayan Bank − − − 115,124Maybank − − − 52,743Philippine Commercial Capital, Inc. − − − 434,884Philippine National Bank − 47,000,000 − 680,817Philippine Savings Bank − − − 168,476Philippine Trust Co. − 6,502,800 − 1,069,852Philippine Veterans Bank − − − 112UCPB Savings Bank − 14,000,000 − 3,231,515

P=− P=178,309,538 P=− P=7,295,140

SHORT-TERM INVESTMENTSCitysavings Bank P=− P=33,000,000 P=− P=49,498China Bank Savings − 25,500,000 – 65,733

P=− P=236,809,538 P=− P=7,410,371

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Name of Issuing Entity and Description of Each Issue Number of Shares or PrincipalAmount of Bonds and Notes

Amount Shown in theStatement of financial

position

Value Based onMarket Quotations at

Balance Sheet Date

Income Received andAccrued

FINANCIAL ASSETS AT FVOCIEmpire East P=300,301 P=94,595 P=94,595 P=−Ayala Land “B” Preferred 16,875 1,688 1,688 −First Holding “B” 5,126 394,702 394,702 −Swift Foods 150 19 19 −Ayala Corporation “B” Preferred 227 227 227 −Ayala Land “B” Common 75 3,067 3,067 −

P=322,754 P=494,298 P=494,298 P=−

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SCHEDULE B. AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES AND PRINCIPAL STOCKHOLDERS(OTHER THAN RELATED PARTIES)

Name of Designationor Debtor

Balance atbeginning of

periodAdditions Amounts

collectedAmounts

written off Current Not Current Balance at endof period

SCHEDULE C. AMOUNTS RECEIVABLE FROM RELATED PARTIES WHICH ARE ELIMINATED DURING THE CONSOLIDATION OF FINANCIALSTATEMENTS

Name of Designationor Debtor

Balance atbeginning of

periodAdditions Amounts

collectedAmounts

written off Current Not Current Balance at endof period

SCHEDULE D. LONG–TERM DEBT

Title of Issue and type ofObligation

Amountauthorized by indenture

Amount shown undercaption "Current portion oflong-term debt" in related

balance sheet

Amount shown undercaption "Long-Term Debt" in

related balance sheet

Not applicable. The Company has no long-term debt.

Not applicable. No directors, officers, employees, and principal stockholders (other than related parties) fromwhom an aggregate indebtedness of more than P100,000 or one percent of total assets, whichever is less, is owed.

Not Applicable

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SCHEDULE E. INDEBTEDNESS TO RELATED PARTIESName of related parties Balance at beginning of period Balance at end of period

CI (Ultimate Parent) P=601,329 P=1,444,845CDC (Parent) 285,978 −CPI (Affiliate) − −Key management personnel 9,681,159 2,696,293

SCHEDULE F. GUARANTEES OF SECURITIES OF OTHER ISSUERSName of issuing entity of

securities guaranteed by thecompany for which this

statement is filed

Title of issue of each classof securities guaranteed

Total amountguaranteed and

outstanding

Amount ownedby person for

which statementis filed

Nature of guarantee

SCHEDULE G. CAPITAL STOCK

Title of IssueNumber of

SharesAuthorized

Number of SharesIssued and

Outstanding atshown under

related Statement ofFinancial Position

Caption

Number ofShares Reserved

for Options,Warrants,

Conversion andOther Rights

Number Shares Held By

Affiliates Directors, Officersand Employees Others

Common Stock – P1 par value 1,435,000,000 1,431,785,284 − 1,154,770,827 49,697,627 227,316,830

Not applicable. The Company has no guarantees of securities of other issuers.

*SGVFSM006891*

INDEPENDENT AUDITOR’S REPORTON COMPONENTS OF FINANCIAL SOUNDNESS INDICATORS

The Stockholders and the Board of DirectorsCity & Land Developers, Incorporated3rd Floor, Cityland Condominium 10, Tower I156 H.V. de la Costa StreetMakati City

We have audited in accordance with Philippine Standards on Auditing, the financial statements ofCity & Land Developers, Incorporated (the Company) as at December 31, 2020 and 2019 and for each ofthe three years in the period ended December 31, 2020, and have issued our report thereon datedMarch 24, 2021. Our audits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The Supplementary Schedule of Financial Soundness Indicators, includingtheir definitions, formulas, calculation, and their appropriateness or usefulness to the intended users, arethe responsibility of the Company’s management. These financial soundness indicators are not measuresof operating performance defined by Philippine Financial Reporting Standards (PFRSs) and may not becomparable to similarly titled measures presented by other companies. This schedule is presented for thepurpose of complying with the Revised Securities Regulation Code Rule 68 issued by the Securities andExchange Commission, and is not a required part of the basic financial statements prepared in accordancewith PFRSs. The components of these financial soundness indicators have been traced to the Company’sfinancial statements as at December 31, 2020 and 2019 and for each of the three years in the period endedDecember 31, 2020 and no material exceptions were noted.



March 24, 2021


Tel: (632) 8891 0307Fax: (632) 8819 0872ey.com/ph




SCHEDULE IV

CITY & LAND DEVELOPERS, INCORPORATEDSUPPLEMENTARY SCHEDULE OFFINANCIAL SOUNDNESS INDICATORS

Ratio December 312020 2019 2018

Current 6.98 6.82 4.58Asset-to-equity 1.12 1.13 1.22Debt-to-equity – – 0.10Asset-to-liability 9.08 8.60 5.59Solvency 0.38 0.62 0.34Interest rate coverage – – –Acid-test 1.40 1.61 2.35Return on equity 4.69% 8.12% 7.31%Return on asset 4.18% 7.18% 6.00%Net profit margin 29.50% 27.92% 29.42%Basic/Diluted earnings per share* P=0.07 P=0.12 P=0.10**After retroactive effect of 5% stock dividend in 2019.

Manner of Calculation:

Current ratio = Total Current Assets / Total Current Liabilities

Asset-to-equity ratio =

Total AssetsTotal equity (net of net changes in fair value of financial assets at fair

value through other comprehensive income and accumulated re-measurement on defined benefit plan)

Debt-to-equity ratio =

Notes and Contracts PayableTotal equity (net of net changes in fair value of financial assets at fair

value through other comprehensive income and accumulated re-measurement on defined benefit plan)

Asset-to-liability ratio = Total Assets / Total Liabilities

Solvency ratio = Net Income after Tax + Depreciation ExpenseTotal Liabilities

Interest rate coverageratio = Net Income Before Tax + Depreciation Expense + Interest Expense

Interest Expense

Acid-test ratio =

Cash and Cash Equivalents + Short-term Investments +Installment Contracts Receivable, current + Contract Assets, current +

Other Receivables, currentTotal Current Liabilities

Return on equity ratio = Net Income after Tax Stockholder's Equity

Return on assets ratio = Net IncomeTotal Assets

- 2 -

Net Profit Margin = Net Income after TaxTotal Revenue

Basic/Dilutedearnings per share = Net income after Tax

Outstanding shares

SCHEDULE V

CITY & LAND DEVELOPERS, INCORPORATEDSCHEDULE OF GROSS AND NET PROCEEDS OF COMMERCIAL PAPERS ISSUEDAs of December 31, 2020

In 2020 and 2019, the Company no longer applied for a new Certificate of Permit to Offer Securities forSale. All outstanding commercial papers in 2019 have been paid to the investors on or beforeNovember 6, 2019.

C O V E R S H E E T

SEC Registration Number 1 5 2 6 6 1





3 / F C i t y l a n d C o n d o m i n i u m 1 0

T o w e r I , 1 5 6 H . V . d e l a C o s t a



1 7 - Q M S R D N / A



[email protected]

8-893-6060 0968-545-1452


751 (as of March 31, 2021)

2nd Tuesday of June December 31






3/F Cityland Condominium 10 Tower II, 154 H. V. Dela Costa Street, Makati City NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated. 2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records with the Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies.

TAA FMSD <[email protected]>

City & Land Developers, Incorporated_SEC Form 17Q March 31,2021_14May2021 2 messages

TAA FMSD <[email protected]> Fri, May 14, 2021 at 1:43 PMTo: ICTD Submission <[email protected]>, MSRD COVID19 <[email protected]>Cc: Officer Rudy Go <[email protected]>, FMSD Cityland <[email protected]>

Dear Sir/Madam,

Good day!

We are submitting herewith the SEC Form 17Q of City & Land Developers, Incorporated as of andfor the period ended March 31, 2021.

The said file will also be submitted to PSE Edge portal and to be uploaded to the Company'swebsite. We have also attached the Certification signed by our Senior Vice President/ComplianceOfficer, Mr. Rudy Go.

We hope that you will find everything in order. Thank you very much.

-- Regards,Therese Raimunda R. Aquino-Anoos | Cityland Group of Companies

2 attachments

City & Land Developers, Incorporated_SEC Form 17Q Certification_14May2021.pdf 123K

City & Land Developers, Incorporated_SEC Form 17Q March 31, 2021_14May2021.pdf 2845K

ICTD Submission <[email protected]> Fri, May 14, 2021 at 1:43 PMTo: [email protected]

Dear Customer,

SUCCESSFULLY ACCEPTED (subject to verification and review of the quality of the attached document)

Thank you.

SEC ICTD.

https://mail.google.com/mail/u/0?ui=2&ik=5256d26667&view=att&th=179696679662d141&attid=0.1&disp=attd&realattid=f_konw9adv0&safe=1&zw

https://mail.google.com/mail/u/0?ui=2&ik=5256d26667&view=att&th=179696679662d141&attid=0.2&disp=attd&realattid=f_konw9aeb1&safe=1&zw

SECURITIES AND EXCHANGE COMMISSION SEC FORM 17- Q

QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141

OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended March 31, 2021 2. SEC Identification Number 152661 3. BIR Tax Identification No. 000-444-840 4. Exact name of issuer as specified in its charter

CITY & LAND DEVELOPERS, INCORPORATED

5. Makati City, Philippines 6. (SEC Use Only) Province, country or other jurisdiction Industry Classification Code of incorporation 7. 3/F Cityland Condominium 10 Tower I, 156 H.V. Dela Costa Street, Makati City 1226 Address of Principal Office Postal Code 8. 632-8-893-6060 Issuer's telephone number, including area code 9. Former name, former address and former fiscal year, if changed since last report N/A 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock

Outstanding Unclassified Common Shares 1,431,785,284 11. Are any or all of these securities listed on a Stock Exchange. Yes [ x ] No [ ] If yes, state the name of such stock exchange and the classes of securities listed therein:

Stock Exchange Title of Each Class Philippine Stock Exchange Unclassified Common Shares

12. Check whether the issuer:

(a) Has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 thereunder or Sections 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines; during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports):

Yes [ x ] No [ ]

(b) Has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ]

1

PART I – FINANCIAL INFORMATION Item 1. Financial Statements

The financial statements and accompanying notes are filed as part of this form (pages 9 to 63). Item 2. Management's Discussion and Analysis of Financial Condition and Results of

Operation

During the Year 2020, the Philippine economy has encountered significant threats due to several unexpected events such as the Taal Volcano eruption and the effects of the COVID-19 pandemic that led to the implementation of community quarantines to mitigate the risk of the pandemic which caused some industries to slow down its operations. Despite the risks that the economy encountered during the previous year, the Philippine economy showed a positive start in the Year 2021 due to slight increase in the Gross Domestic Product (GDP) posted for the 1st quarter. From the 2020 4th quarter’s -8.3% decline in GDP, the first quarter of 2021 has lessened the contraction to -4.2% which is 49.40% higher compared to that of the previous quarter. In terms of seasonally-adjusted quarter-to-quarter basis, the GDP actually grew by 0.3%. The human health and social work activities are the highest contributors to the growth of the country’s GDP. However, the real estate, together with the ownership of dwellings, was ranked third as the main contributors of the GDP’s decline.

Regardless of the economic disruptions caused by the COVID-19 pandemic, City & Land Developers, Incorporated (the Company) believes that long-term prospects remain attractive to the real estate industry. Further, the Development Budget Coordination Committee (DBCC) projected a growth of 6.5% to 7.5% for the Year 2021 which keeps the Group optimistic during this pandemic. On the other hand, the Philippine Government implemented the “Corporate Recovery and Tax Incentives for Enterprises Act” or “CREATE” that provides tax deductions to businesses of all sizes as part of the recovery program. Although the scale and duration of the impact of the pandemic remain uncertain as at the report date, the Company is optimistic that the real estate sector will eventually show a healthy position in the market in the succeeding periods. As this global problem evolves, the Company will continually adapt and adjust its business model according to the business environment in the areas where the Company operates, in full cooperation with the national and local government units.

The Company completed last March 2018 the North Residences, which is a 29-storey residential and commercial condominium, located at EDSA corner Lanutan, Barangay Veterans Village, Quezon City (beside Waltermart). On October 20, 2016, the Company launched One Taft Residences, a 40-storey mixed residential, office and commercial condominium located at 1939 Taft Avenue, Malate, Manila. This project is currently under construction and expected to be completed by September 2022. Internal sources of liquidity come from sales of condominium units and real estate properties, collection of installment contracts receivables and contract assets and maturing short-term investments. Other sources include rental income, interest and dividend income.

2

Future Project:

One Hidalgo One Hidalgo is a 39-storey mixed residential, office and commercial condominium to be located at 1730 P. Hidalgo Lim St., corner Gen. Malvar St., Malate, Manila. It is near various universities (De La Salle University, University of the Philippines - Manila, Philippine Christian University), government agencies (Supreme Court, Court of Appeals, Department of Justice) and other leisure establishments.

The Company has also a number of prime lots reserved for future projects. Its land bank is situated in strategic locations ideal for horizontal and vertical developments. In January 2018, the Company acquired a new property along Boni Ave., Mandaluyong City which is held for future development. Financial Condition (March 31, 2021 vs. December 31, 2020)

The Company’s balance sheet as of March 31, 2020 remained solid with total assets of P=2.56 billion, higher by 2.26% as compared to the balance as of December 31, 2020 of P=2.50 billion. The increase in total assets was significantly due to the increase in real estate properties for sale and real estate properties held for future development. The percentage of completion of the Company’s on-going project continue to progress as it goes near its estimated completion date. Excess funds were placed in short-term investments to maintain liquidity and generate additional interest income. The financial position remained stable as total cash and cash equivalents and short-term investments stood at P=236.63 million and P=236.81 million, as of March 31, 2021 and December 31, 2020, respectively. On the liabilities side, total liabilities increased by 10.53% from P=275.75 million as of December 31, 2020 to P=304.78 million as of March 31, 2021. This was primarily due to the increase in accrued development costs. Total equity as of March 31, 2021 stood at P=2.26 billion from P=2.23 billion as of December 31, 2020, higher by 1.24%, due to comprehensive income of P=27.54 million. As a result of the foregoing, the Company registered current and acid test ratio of 5.94:1 and 1.07:1 as of the first quarter of 2021, as compared to 6.98:1 and 1.40:1 as of December 31, 2020. Asset-to-liability remained stable at 8.40:1 in March 31, 2021 as compared to 9.08:1 in December 31, 2020. Results of Operation (March 31, 2021 vs. March 31, 2020) Sales of real estate properties reached P=129.43 million as of March 31, 2021 as compared to the previous year’s sales of P=73.09 million. Sales for the first quarter came from sale of condominium units of One Taft Residences and North Residences. The increase in sales amount was attributed to the increase in the percentage of completion since revenue from the sale of these real estate projects under pre-completion stage are recognized over time during the construction period (or percentage of completion).

Other sources of income are financial income, rent income and other income. Financial income which is composed of interest income from sale of real estate properties, cash and cash equivalents and short-term investments accounted for 12.15% of total revenues. Likewise, rental income amounted to P=1.43 million as of the first quarter of 2021 as compared to P=1.73 million of the same period last year. Other income - net, on the other hand, pertains to adjustment of market

3

value of repossessed units, penalties charged to clients, gain on sale of shares of stock and other miscellaneous income. Revenue contribution of this account amounted to P=1.40 million and P=0.62 million as of March 31, 2021 and 202-, respectively. On the cost side, cost of real estate sales increased as this moves in tandem with the sales of real estate properties. In addition, provision for income tax decreased due to lower tax rate as an impact of the approval of CREATE Act. As a result of the foregoing, the Company recorded a net income as of March 31, 2021 of P=27.14 million as compared to P=24.04 million as of March 31, 2020. This translated into an annualized earnings per share and return on equity of P=0.08 and 4.81%, respectively as compared to the same period last year of P=0.07 and 4.40%, respectively.

Financial Ratios March 31, 2021

(Unaudited) December 31, 2020

(Audited)

March 31, 2020 (Unaudited)

Current 5.94 6.98 7.81 Asset-to-equity 1.13 1.12 1.11 Debt-to-equity – – – Asset-to-liability 8.40 9.08 9.49 Solvency* 0.36 0.38 0.37 Interest rate coverage – – – Acid-test ratio 1.07 1.40 2.09 Return on equity (%)* 4.81% 4.69% 4.40% Return on asset (%)* 4.24% 4.18% 3.93% Net profit margin 18.03% 29.50% 24.88%

Basic/Diluted earnings per share* P=0.08 P=0.07 P=0.07 * Annualized for the period of March 31, 2021 and March 31, 2020

Manner of Calculation:

Current ratio

=

Total Current Assets / Total Current Liabilities


Total Assets

Total equity (net of net changes in fair value of financial assets at fair value through other comprehensive income and accumulated re-

measurement on defined benefit plan)


Notes and Contracts Payable

Total equity (net of net changes in fair value of financial assets at fair value through other comprehensive income and accumulated re-

measurement on defined benefit plan)


=

Total Assets / Total Liabilities

Solvency ratio =

Net Income after Tax + Depreciation Expense

Total Liabilities

Interest rate coverage ratio =

Net Income Before Tax + Depreciation Expense + Interest Expense

Interest Expense

Acid-test ratio =

Cash and Cash Equivalents + Short-term Investments +

Installment Contracts Receivable, current + Contract Assets, current + Other Receivables, current

Total Current Liabilities


=

Net Income after Tax

Stockholder's Equity

4

Return on assets ratio = Net Income Total Assets

Net Profit Margin

=


Total Revenue

Basic/Diluted earnings per share

=

Net income after Tax

Outstanding shares

Items affecting assets, liabilities, equity, net income, or cash flows that are unusual because of their nature, size or incidents There are no unusual items affecting assets, liabilities, equity, net income or cash flows. Any changes in estimates of amounts reported in prior interim periods of the current financial year or changes in estimates of amounts reported in prior financial years that have a material effect in the current interim period There are no changes in estimates of amounts reported in prior interim periods of the current financial year or changes in estimates of amounts reported in prior financial years that have a material effect in the current interim period.

Any issuances, repurchases, and repayments of debt and equity securities Debt securities In 2020 and 2019, the Company no longer applied for a new Certificate of Permit to Offer Securities for Sale. All outstanding commercial papers in 2019 have been paid to the investors on or before November 6, 2019.

Equity securities There are no issuances, repurchases and repayments of equity securities during the first quarter of 2021. Any material events subsequent to the end of the interim period that have not been reflected in the financial statements for the interim period There are no material events subsequent to the end of the interim period that have not been reflected in the financial statements for the interim period. Effect of changes in the composition of the issuer during the interim period, including business combinations, acquisition or disposal of subsidiaries and long-term investments, restructuring, and discontinuing operations. There are no changes in the composition of the issuer during the interim period, including business combinations, acquisition or disposal of subsidiaries and long-term investments, restructuring, and discontinuing operations.

Any changes in contingent liabilities or contingent assets since the last annual balance sheet date There are no contingent liabilities or contingent assets since the last annual balance sheet date.

5

Any Known Trends, Events or Uncertainties (Material impact on liquidity) The COVID-19 pandemic has caused business disruptions due to the community quarantines implemented over Luzon. The Company’s liquidity was affected due to the decline in sales of real estate properties and lower collections as a result of higher number of forfeitures. Internal and External Sources of Liquidity

Internal sources come from sales of condominium and real estate properties, collection of installment contracts receivables and maturing short-term investments. Other sources include rental income, interest and dividend income. Any Material Commitments for Capital Expenditures and Expected Sources of Funds of such Expenditures The estimated development cost of P=140.11 million as of March 31, 2021 representing the accrued payable of real estate properties sold will be sourced through:

a. Sales and lease of condominium and real estate properties b. Collection of installment contract receivables c. Maturing short-term investments

Any Known Trend or Events or Uncertainties (Material Impact on Net Sales or Revenues or Income from Continuing Operations)

On March 16, 2020, Philippine President Rodrigo Duterte declared the entire Luzon area under “enhanced community quarantine” restricting movement of the population in response to the growing pandemic of the Coronavirus disease 2019 (COVID-19) in the country. This has been extended in the National Capital Region and in some other affected areas until May 31, 2020. Starting June 1, 2020, NCR and other parts of the Philippines were declared to be under general community quarantine (GCQ), until June 15, 2020. The GCQ was further extended until June 30, 2020, then again until July 15, 2020. Afterwards, the GCQ was extended until July 30, 2020. On August 3, 2020, the President of the Philippines reverted Metro Manila, and the provinces of Laguna, Cavite, Rizal and Bulacan to modified enhanced community quarantine from general community quarantine from August 4, 2020 until August 18, 2020. Starting August 19, 2020, Metro Manila, as well as the provinces of Laguna, Cavite, Rizal, and Bulacan, returned to general community quarantine unless earlier lifted or extended. As of March 31, 2021, Metro Manila and some nearby provinces were placed under the enhanced community quarantine due to the surge in the number of COVID cases. The quarantine measures were implemented in order to manage the spread of the virus. The COVID-19 pandemic has caused disruptions in the Company’s business activities. Further, the scale and duration of the impact of the pandemic remain uncertain as at the report date. It is not possible to estimate the overall impact of the outbreak’s near-term and longer effects. The outbreak could have a material impact on the Company’s financial results for the rest of 2021 and even periods thereafter. As this global problem evolves, the Company will continually adapt and adjust its business model according to the business environment in the areas where the Company operates, in full cooperation with the national and local government units.

6

Any Significant Elements of Income or Loss that did not arise from Registrant’s Continuing Operations There were no significant elements of income or loss that did not arise from registrant’s continuing operations.

Causes for any Material Changes from Period to Period in One or More Line of the Registrants Financial Statements

Financial Condition (March 31, 2021 vs. December 31, 2020) a) Increase in Cash and Cash Equivalents was due to sales, collection and shift of placements to

shorter term investments. b) Decrease in Short-term Investments was shift of placements to shorter term investments.. c) Decrease in Installment Contracts Receivable was due collection of receivables from clients. d) Decrease in Contract Assets was due to collection from sales of real estate properties. e) Decrease in Cost to Obtain Contract was due to the recognition of commission expense

relative to the increase in percentage of completion of an ongoing project. f) Increase in Real Estate Properties for Sale was due to construction costs incurred as reflected

in the increase in the percentage of completion of the Company’s on-going project. g) Decrease in Financial Assets at Fair Value through Other Comprehensive Income (FVOCI)

was due to decrease in market value of shares of stock. h) Increase in Other Receivables was due to higher due from related parties and advances to

customers. i) Increase in Prepaid Tax was due to the reduction in regular corporate income tax rate as an

impact of the CREATE Act which was passed into bill on March 26, 2021. The reduction in the tax rate is effective July 1, 2020.

j) Increase in Real Estate Properties for Future Development was due to additional development costs incurred as of March 31, 2021.

k) Decrease in Other Assets was due to utilization of input VAT and prepaid expenses. l) Increase in Accounts Payable and Accrued Expenses was substantially due to higher accrued

expense on development costs and directors’ fee and increase in withholding taxes payable. m) Decrease in Contract Liabilities was due to increase in percentage of completion which

satisfied the payments made by the clients n) Decrease in Income Tax Payable was due to the reduction of tax rate as an effect of the

CREATE Act. o) Decrease in Deferred Income Tax Liabilities was due to remeasurement as an effect of the

CREATE Act. p) Decrease in Unrealized Fair Value of Investments on FVOCI was due to decrease in market

value of shares of stock. q) Decrease in Accumulated Re-measurement Loss on Defined Benefit Plans -

net of deferred income tax effect was due to the remeasurement of the deferred income tax as result of the reduction in tax rate.

r) Increase in Retained Earnings was due to the comprehensive income recognized as of March 31, 2021.

Results of Operation (March 31, 2021 vs. March 31, 2020) a) Increase in Sales of Real Estate Properties was due to increase in the percentage of

completion of the ongoing project. Revenue from the sale of these real estate projects under pre-completion stage are recognized over time during the construction period (or percentage of completion).

7

b) Decrease in Financial Income was due to lower interest income earned from cash and cash equivalents and short-term investments.

c) Decrease in Rent Income was due to the lower income from short-term leases. d) Increase in Other Income was due to recognition of the increase in fair market values of

repossessed units. e) Increase in Cost of Real Estate Sales was due to increase in the percentage of completion as

this moves in tandem with the sale of real estate properties. f) Decrease in Operating Expenses was due to lower taxes and licenses, repairs and

maintenance and outside services . g) Decrease in Financial Expenses was due to lower finance charges. h) Decrease in Provision for Income Tax was due to the lower tax rate based on the CREATE

Act. Further, the provision for income tax as of March 31, 2021 includes the difference of the provision for income tax reflected in the 2020 audited financial statements and the provision for income tax shown in the income tax return.

i) Increase in Net Income was due to increase in realized gross profit as a result of increase in the percentage of completion and lower provision for income tax as an impact of the implementation of CREATE Act.

Any seasonal aspects that had a material effect on the financial condition and results of operation There are no seasonal aspects that had a material effect on the financial condition and results of operations.

Compliance to Philippine Accounting Standard (PAS) 34, Interim Financial Reporting The Company’s unaudited interim financial statements is in compliance with Philippine Accounting Standard (PAS) 34, Interim Financial Reporting. The same accounting policies and methods of computation are followed as compared with the most recent annual audited financial statements. However, the unaudited interim financial statements as of March 31, 2021 do not include all of the information and disclosures required in the annual audited financial statements and therefore, should be read in conjunction with the annual financial statements as of and for the year ended December 31, 2020. There are no any events or transactions that are material to an understanding of the current interim period.

PART II – OTHER INFORMATION

Disclosures not made under SEC Form 17-C There are no reports that were not made under SEC Form 17-C.

9

CITY & LAND DEVELOPERS, INCORPORATED STATEMENTS OF FINANCIAL POSITION Unaudited Audited March 31, 2021 December 31, 2020

ASSETS

Current Assets Cash and cash equivalents (Note 4) P=236,632,833 P=178,309,538 Short-term investments (Note 4) – 58,500,000 Current portion of: Installment contracts receivable (Note 5) 1,282,382 1,765,893 Contract assets (Note 5) 19,239,060 45,757,086 Cost to obtain contract (Note 5) 3,568,307 3,598,890 Other receivables (Note 6) 2,780,134 2,216,653 Real estate properties for sale (Note 8) 1,172,313,146 1,138,427,667 Prepaid tax 6,088,232 – Other current assets (Note 10) 52,451 4,298,601 Total Current Assets 1,441,956,545 1,432,874,328 Noncurrent Assets Contract assets - net of current portion (Note 5) 387,855,598 362,442,313 Cost to obtain contract- net of current portion (Note 5) 1,761,280 2,931,886 Other receivables - net of current portion (Note 6) 1,426,160 1,406,160 Financial assets at fair value through

other comprehensive income (FVOCI) (Note 7) 446,541 494,298 Real estate properties held for future development (Note 8) 517,581,282 494,356,932 Investment properties (Note 9) 181,139,332 181,139,332 Other noncurrent assets (Note 10) 28,546,311 28,489,712 Total Noncurrent Assets 1,118,756,504 1,071,260,633

TOTAL ASSETS P=2,560,713,049 P=2,504,134,961

LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued expenses (Note 12) P=167,360,387 P=130,171,009 Contract liabilities (Note 5) 75,439,315 74,415,683 Income tax payable – 786,568 Total Current Liabilities 242,799,702 205,373,260 Noncurrent Liabilities Accounts payable and accrued expenses - noncurrent portion (Note 12) 23,875,219 12,826,411 Contract liabilities - net of current portion (Note 5) 32,026,756 50,931,630 Retirement benefits liability - (Note 20) 3,949,772 3,949,772 Deferred income tax liabilities - net (Note 19) 2,128,513 2,665,373 Total Noncurrent Liabilities 61,980,260 70,373,186

TOTAL LIABILITIES P=304,779,962 P=275,746,446

(Forward)

10

CITY & LAND DEVELOPERS, INCORPORATED STATEMENTS OF FINANCIAL POSITION Unaudited Audited March 31, 2021 December 31, 2020

Equity Capital stock - P=1.00 par value (Note 14) Authorized - 1,435,000,000 shares as of March 31, 2021

and December 31, 2020 Issued - 1,431,785,284 shares held by 751 and 756

equity holders as of March 31, 2021 and December 31, 2020, respectively P=1,431,785,284 P=1,431,785,284

Additional paid-in capital 105,136 105,136 Unrealized fair value changes on financial assets at fair value

through other comprehensive income (FVOCI) (Note 7) 350,706 398,463 Accumulated re-measurement loss on defined benefit plans -

net of deferred income tax effect (5,884,977) (6,337,668) Retained earnings (Note 15) 829,576,938 802,437,300

TOTAL EQUITY 2,255,933,087 2,228,388,515

TOTAL LIABILITIES AND EQUITY P=2,560,713,049 P=2,504,134,961 See accompanying Notes to Financial Statements.

11

CITY & LAND DEVELOPERS, INCORPORATED STATEMENTS OF INCOME UNAUDITED

For the 3-month ended

March 31, 2021


March 31, 2020 REVENUES Sales of real estate properties (Note 5) P=129,434,441 P=73,094,804 Financial income (Note 15) 18,295,211 21,170,020 Rent income (Note 9) 1,434,046 1,733,654 Other income - net (Note 16) 1,400,086 616,709 150,563,784 96,615,187 EXPENSES Cost of real estate sales (Note 8) 91,717,668 38,922,830 Operating expenses (Note 17) 27,026,929 27,576,799 Financial expenses (Note 19) 43,750 123,450 118,788,347 66,623,079 INCOME BEFORE INCOME TAX 31,775,437 29,992,108 PROVISION FOR INCOME TAX (Note 21) 4,635,799 5,953,511 NET INCOME P=27,139,638 P=24,038,597 BASIC/DILUTED EARNINGS PER SHARE

(Note 22)

P=0.02

P=0.02 See accompanying Notes to Financial Statements.

12

CITY & LAND DEVELOPERS, INCORPORATED STATEMENTS OF COMPREHENSIVE INCOME

UNAUDITED For the

3-month ended March 31, 2021


March 31, 2020 NET INCOME P=27,139,638 P=24,038,597

OTHER COMPREHENSIVE INCOME Not to be reclassified to profit or loss in subsequent periods:

Changes in fair value of financial assets at FVOCI (Note 7) (47,757) 92,441

Remeasurement gain due to change in tax rate (Note 21) 452,691 – TOTAL COMPREHENSIVE INCOME P=27,544,572 P=24,131,038 BASIC/DILUTED EARNINGS PER SHARE P=0.02 P=0.02 See accompanying Notes to Financial Statements.

13

CITY & LAND DEVELOPERS, INCORPORATED STATEMENTS OF CHANGES IN EQUITY

Capital stock

Additional

Unrealized fair

value changes on Financial Assets

at FVOCI

Accumulated re-measurement on

defined benefit

Retained earnings

(Note 14) Paid in Capital (Note 7) plan (Note 14) Total BALANCES AT JANUARY 1, 2021 P=1,431,785,284 P=105,136 P=398,463 (P=6,337,668) P=802,437,300 P=2,228,388,515 Net income – – – – 27,139,638 27,139,638 Other comprehensive loss – – (47,757) – – (47,757) Remeasurement gain due to change in tax rate (Note 21)

–

–

–

452,691

–

452,691

Total comprehensive income (loss) – – (47,757) 452,691 27,139,638 27,544,572 BALANCES AT MARCH 31, 2021 P=1,431,785,284 P=105,136 P=350,706 (P=5,884,977) P=829,576,938 P=2,255,933,087

Capital stock

Additional Paid in Capital

Unrealized fair

value changes on Financial Assets at

FVOCI

Accumulated re-measurement on

defined benefit plan

Retained earnings

Total BALANCES AT JANUARY 1, 2020 P=1,431,785,284 P=105,136 P=392,077 (P=9,298,273) P=739,692,044 P=2,162,676,268 Net income – – – – 24,038,597 24,038,597 Other comprehensive income – – 92,441 – – 92,441 Total comprehensive income – – 92,441 – 24,038,597 24,131,038 BALANCES AT MARCH 31, 2020 P=1,431,785,284 P=105,136 P=484,518 (P=9,298,273) P=763,730,641 P=2,186,807,306

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CITY & LAND DEVELOPERS, INCORPORATED STATEMENTS OF CASH FLOWS

UNAUDITED

As of March 31, 2021

As of March 31, 2020

CASH FLOW FROM OPERATING ACTIVITIES

Income before income tax P=31,775,437 P=29,992,108 Adjustments for:

Interest income (Note 15) (18,295,211) (21,170,020) Changes in operating assets and liabilities:

Decrease (increase) in: Real estate properties for sale (Note 8) (33,885,479) 32,088,451 Contract assets (Note 5) 1,104,741 3,049,096 Installment contracts receivable (Note 5) 483,511 (11,767,389) Other receivables (Note 6) (700,696) (2,574,054) Real estate properties for future development (Note 8) (23,224,350) (944,671) Cost to obtain contracts (Note 5) 1,201,189 (624,470) Other assets (Note 10) 4,189,551 2,954,816

Increase (decrease) in: Contract liabilities (Note 5) (17,881,242) 22,708,812 Accounts payable and accrued expenses (Note 11) 48,238,187 (51,591,242)

Cash from (used in) operations (6,994,362) 2,121,437 Interest received 18,412,427 21,398,371 Income taxes paid, including prepaid tax (11,594,770) (7,689,304) Net cash flows from operating activities (176,705) 15,830,504 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from short-term investment 58,500,000 (15,500,000) Net cash from (used in) investing activities 58,500,000 (15,500,000) CASH FLOWS FROM FINANCING ACTIVITIES Net cash flows used in financing activities − (7,531) NET INCREASE IN CASH AND CASH EQUIVALENTS

58,323,295

322,973

CASH AND CASH EQUIVALENTS AT

BEGINNING OF THE PERIOD 178,309,538 237,660,249 CASH AND CASH EQUIVALENTS

AT END OF THE PERIOD (Note 4) P=236,632,833 P=237,983,222

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CITY & LAND DEVELOPERS, INCORPORATED NOTES TO FINANCIAL STATEMENTS 1. Corporate Information

City & Land Developers, Incorporated (the Company) was incorporated in the Philippines on June 28, 1988. Its primary purpose is to establish an effective institutional medium for acquiring and developing suitable land sites for residential, office, commercial, institutional and industrial uses primarily, but not exclusively, in accordance with the subdivision, condominium, and cooperative concepts of land-utilization and land-ownership. The Company’s registered office and principal place of business is 3/F Cityland Condominium 10, Tower I, 156 H. V. de la Costa Street, Makati City. The Company is 49.73% -owned by Cityland Development Corporation (CDC), a publicly listed company incorporated and domiciled in the Philippines. The Company’s ultimate parent is Cityland, Inc. (CI), a company incorporated and domiciled in the Philippines, which prepares consolidated financial statements and that of its subsidiaries. On May 14, 2021, the Audit and Risk Committee approved and authorized the issuance of the Company’s unaudited financial statements as of and for the period ended March 31, 2021.

2. Summary of Significant Accounting and Financial Reporting Policies

Basis of Preparation The financial statements of the Company have been prepared using the historical cost basis, except for financial assets measured at fair value through other comprehensive income (FVOCI) that have been measured at fair values. The financial statements are presented in Philippine peso (Peso), which is the Company’s functional currency, and rounded to the nearest Peso except when otherwise indicated. The financial statements have been prepared under the going concern assumption. The Company believes that its businesses would remain relevant despite challenges posed by the COVID-19 pandemic. Despite the adverse impact of the COVID-19 pandemic on short-term business results, long-term prospects remain attractive.

Statement of Compliance The Company’s financial statements have been prepared in accordance with Philippine Financial Reporting Standards (PFRSs) which include the availment of reliefs granted by the SEC under Memorandum Circular No. 14, Series of 2018 and Memorandum Circular No. 3, Series of 2019, to defer the implementation of the following accounting pronouncements until December 31, 2020. These accounting pronouncements address the issues of PFRS 15, Revenue from Contracts with Customers, affecting the real estate industry.

• Deferral of the following provisions of Philippine Interpretations Committee (PIC) Q&A 2018-12, PFRS 15 Implementation Issues Affecting the Real Estate Industry

a. Assessing if the transaction price includes a significant financing component (as amended by PIC Q&A 2020-04);

b. Treatment of land in the determination of percentage-of-completion (POC); c. Treatment of uninstalled materials in the determination of POC (as amended by PIC Q&A

2020-02); and, d. Accounting for Common Usage Service Area (CUSA) charges.

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• Deferral of the adoption of PIC Q&A 2018-14: Accounting for Cancellation of Real Estate Sales (as amended by PIC Q&A 2020-05)

The Company also availed of the relief provided by SEC Memorandum Circular No. 4, Series of 2020, deferring the adoption of IFRIC Agenda Decision on Over Time Transfers of Constructed Goods under PAS 23, Borrowing Cost, (the IFRIC Agenda Decision on Borrowing Cost) until December 31, 2020.

In December 2020, the SEC issued Memorandum Circular No. 34, Series of 2020, allowing the further deferral of the adoption of provisions (a) and (b) above of PIC Q&A 2018-12 and the IFRIC Agenda Decision on Borrowing Cost, for another other three (3) years or until December 31, 2023.

Changes in Accounting Policies The accounting policies adopted are consistent with those of the previous financial year, except that the Company has adopted the following new accounting pronouncements starting January 1, 2021: • Amendments to PFRS 9, PFRS 7, PFRS 4 and PFRS 16, Interest Rate Benchmark Reform –

Phase 2

The amendments provide the following temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR):

o Practical expedient for changes in the basis for determining the contractual cash flows as a result of IBOR reform

o Relief from discontinuing hedging relationships o Relief from the separately identifiable requirement when an RFR instrument is

designated as a hedge of a risk component

The Company shall also disclose information about: o The about the nature and extent of risks to which the entity is exposed arising from

financial instruments subject to IBOR reform, and how the entity manages those risks; and

o Their progress in completing the transition to alternative benchmark rates, and how the entity is managing that transition

The amendments are effective for annual reporting periods beginning on or after January 1, 2021 and apply retrospectively, however, the Company is not required to restate prior periods. These amendments will affect the Company if it will enter into hedge transaction in the future. As of March 31, 2021, the Company has not entered into any hedge transactions.

Effective January 1, 2020 • Amendments to PFRS 3, Business Combinations, Definition of a Business

The amendments to PFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarifies that a business can exist without including all of the inputs and processes needed to create outputs. As of March 31, 2021 and December 31, 2020, the Company did not enter into any business combination. These amendments may impact future periods should the Company enter into such transaction.

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• Amendments to PFRS 7, Financial Instruments: Disclosures and PFRS 9, Financial Instruments, Interest Rate Benchmark Reform

The amendments to PFRS 9 provide a number of reliefs, which apply to all hedging relationships that are directly affected by the interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainties about the timing and or amount of benchmark-based cash flows of the hedged item or the hedging instrument. These amendments will not affect the Company since it does not have any hedge transaction.

• Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, Definition of Material

The amendments provide a new definition of material that states “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.”

The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the financial statements of, nor is there expected to be any future impact to the Company.

• Conceptual Framework for Financial Reporting issued on March 29, 2018

The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the standard-setters in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. The revisions made to Conceptual Framework had no significant impact on the Company’s financial statements.

• Amendments to PFRS 16, COVID-19-related Rent Concessions

The amendments provide relief to lessees from applying the PFRS 16 requirement on lease modifications to rent concessions arising as a direct consequence of the COVID-19 pandemic. A lessee may elect not to assess whether a rent concession from a lessor is a lease modification if it meets all of the following criteria:

• The rent concession is a direct consequence of COVID-19; • The change in lease payments results in a revised lease consideration that is substantially

the same as, or less than, the lease consideration immediately preceding the change; • Any reduction in lease payments affects only payments originally due on or before

June 30, 2021; and • There is no substantive change to other terms and conditions of the lease.

A lessee that applies this practical expedient will account for any change in lease payments resulting from the COVID-19 related rent concession in the same way it would account for a change that is not a lease modification, i.e., as a variable lease payment.

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The amendments are effective for annual reporting periods beginning on or after June 1, 2020. Early adoption is permitted.

Company as Lessee The adoption of these amendments has no significant impact on the financial statements for the period ended March 31, 2021 and year ended December 31, 2020. Company as Lessor Modifications to operating lease terms and conditions on contracts wherein the Company is the lessor were accounted as a new lease from the effective date of the modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease payments for the new lease.

• Deferment of PIC Q&A No. 2018-12 and IFRS Interpretations Committee (IFRIC) Agenda Decision on Over Time Transfer of Constructed Goods [PAS 23 - Borrowing Cost] For Real Estate Industry PIC Q&A No. 2018-12 On February 14, 2018, the Philippines Interpretation Committee (PIC) issued PIC Q&A 2018-12 (PIC Q&A) which provides guidance on some implementation issues of PFRS 15 affecting real estate industry. On October 29, 2018 and February 8, 2019, the Philippine Securities and Exchange Commission (SEC) issued SEC Memorandum Circular No. 14 Series of 2018 and SEC Memorandum Circular No. 3 Series of 2019, respectively, providing relief to the real estate industry by deferring the application of the following provisions of the above PIC Q&A for a period of 3 years:

a. Exclusion of land and uninstalled materials in the determination of percentage of completion (POC) discussed in PIC Q&A No. 2018-12-E

b. Accounting for significant financing component discussed in PIC Q&A No. 2018-12-D c. Accounting to Common Usage Service Area (CUSA) Charges discussed in PIC Q&A

No. 2018-12-H

Under the same SEC Memorandum Circular No. 3, Series of 2019, the adoption of PIC Q&A No. 2018-14: PFRS 15 - Accounting for Cancellation of Real Estate Sales was also deferred. Except for the CUSA charges discussed under PIC Q&A No. 2018-12-H which applies to leasing transactions, the above deferral will only be applicable for real estate sales transactions. Effective January 1, 2021, real estate companies will adopt PIC Q&A No. 2018-12 and PIC Q&A No. 2018-14 and any subsequent amendments thereof retrospectively or as the SEC will later prescribe. However, the Commission en banc, in its meeting held on December 15, 2020, decided to provide relief to the real estate industry by deferring the application of the provisions of the PIC Q&A No. 2018-12 with respect to the accounting for significant financing component and the exclusion of land in the calculation of POC for another period of three years or until 2023. The deferral is to give more than enough time to real estate industry to further evaluate and explore options to resolve the remaining implementing issues and help the industry to mitigate the impact of COVID-19 crisis. The SEC Memorandum Circulars also provided the mandatory disclosure requirements should an entity decide to avail of any relief. Disclosures should include:

a. The accounting policies applied b. Discussion of the deferral of the subject implementation issues in the PIC Q&A c. Qualitative discussion of the impact in the financial statements had the concerned

application guideline in the PIC Q&A been adopted.

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d. Should any of the deferral options result into a change in accounting policy (e.g., when an entity excludes land and/or uninstalled materials in the POC calculation under the previous standard but opted to include such components under the relief provided by the circular), such accounting change will have to be accounted for under PAS 8, i.e., retrospectively, together with the corresponding required quantitative disclosures.

The Company availed of the deferral of adoption of the above specific provisions of PIC Q&A, specifically on PIC Q&A No. 2018-12-D Accounting for significant financing component. Had this provision been adopted, it would have an impact in the financial statements as to the mismatch between the POC of the real estate projects and right to consideration based on the schedule of payments explicit in the contract to sell which constitutes a significant financing component. Interest income would have been recognized for contract assets and interest expense for contract liabilities using effective interest rate method and this would have impacted retained earnings as at January 1, 2021 and the revenue from real estate sales in 2021. Currently, any significant financing component arising from the mismatch discussed above is not considered for revenue recognition purposes. Since the Company’s current practice is in line with the PIC Q&A No. 2018-12-E, PIC Q&A No. 2018-12-H and PIC Q&A No. 2018-14, the Company does not expect significant impact on its financial statements upon adoption of these amendments.

IFRS Interpretations Committee (IFRIC) Agenda Decision on Over Time Transfer of Constructed Goods [PAS 23 - Borrowing Cost] For Real Estate Industry In March 2019, IFRIC published an Agenda Decision on whether borrowing costs can be capitalized on real estate inventories that are under construction and for which the related revenue is/will be recognized over time under par. 35(c) of IFRS 15. IFRIC concluded that borrowing costs cannot be capitalized for such real estate inventories as they do not meet the definition of a qualifying asset under IAS 23 considering that these inventories are ready for their intended sale in their current condition. The IFRIC agenda decision would change the Company’s current practice of capitalizing borrowing costs on real estate projects with pre-selling activities. On February 11, 2020, the Philippine SEC issued Memorandum Circular No. 4, Series of 2020, providing relief to the Real Estate Industry by deferring the mandatory implementation of the above IFRIC Agenda Decision until December 31, 2020. Effective January 1, 2021, the Real Estate Industry will adopt the IFRIC agenda decision and any subsequent amendments thereto retrospectively or as the SEC will later prescribe. A real estate company may opt not to avail of the deferral and instead comply in full with the requirements of the IFRIC agenda decision. On December 15, 2020, the Commission en banc decided to provide relief to the real estate industry by deferring the application of the provisions of the IFRIC Agenda Decision on Over Time Transfers of Constructed Goods under PAS 23, Borrowing Cost for another period of three years or until 2023.

For real estate companies that avail of the deferral, the SEC requires disclosure in the Notes to the Financial Statements of the accounting policies applied, a discussion of the deferral of the subject implementation issues, and a qualitative discussion of the impact in the financial statements had the IFRIC agenda decision been adopted. The Company opted to avail of the relief as provided by the SEC. Had the Company adopted the IFRIC agenda decision, borrowing costs capitalized to real estate inventories related to projects with pre-selling activities should have been expensed out in the period incurred.

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This adjustment should have been applied retrospectively and would have resulted to restatement of prior year financial statements. A restatement would have impacted interest expense, cost of real estate sales, provision for deferred income tax, real estate properties for sale, deferred income tax liability and opening balance of retained earnings.

Current versus Noncurrent Classification The Company presents assets and liabilities in the statements of financial position based on current/noncurrent classification. An asset is current when it is: • Expected to be realized or intended to be sold or consumed in normal operating cycle • Held primarily for the purpose of trading • Expected to be realized within 12 months after the reporting period, or • Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for

at least 12 months after the reporting period. All other assets are classified as noncurrent. A liability is current when: • It is expected to be settled in normal operating cycle • It is held primarily for the purpose of trading • It is due to be settled within 12 months after the reporting period, or • There is no unconditional right to defer the settlement of the liability for at least 12 months

after the reporting period. The Company classifies all other liabilities as noncurrent. Deferred income tax assets and liabilities are classified as noncurrent assets and liabilities, respectively.

Cash and Cash Equivalents Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less from dates of acquisition, and are subject to an insignificant risk of change in value. Short-term Investments Short-term investments are investments with maturities of more than three months but not exceeding one year from dates of acquisition.

Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• in the principal market for the asset or liability, or • in the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to the Company.

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The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities • Level 2 - Valuation techniques for which the lowest level input that is significant to the fair

value measurement is directly or indirectly observable • Level 3 - Valuation techniques for which the lowest level input that is significant to the fair

value measurement is unobservable. For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. a. Financial assets

Initial recognition and measurement Financial assets are classified, at initial recognition, and subsequently measured at amortized cost, fair value through other comprehensive income (FVOCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. The Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Installment contract receivables and contract assets are measured at the transaction price determined under PFRS 15. In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are SPPI on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

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Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: • Financial assets at amortized cost (debt instruments) • Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt

instruments) • Financial assets designated at fair value through OCI with no recycling of cumulative gains

and losses upon derecognition (equity instruments) • Financial assets at fair value through profit or loss

Financial assets at amortized cost (debt instruments) This category is the most relevant to the Company. The Company measures financial assets at amortized cost if both of the following conditions are met: (a) the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and (b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. The Company’s financial assets at amortized cost includes cash and cash equivalents, short-term investments, installment contracts receivable, other receivables and deposits under “Other noncurrent assets”. Financial assets at FVOCI (debt instruments) The Company measures debt instruments at FVOCI if both of the following conditions are met:

(a) The financial asset is held within a business model with the objective of both holding to collect contractual cash flows; and

(b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

For debt instruments at FVOCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the statement of income and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the cumulative fair value change recognized in OCI is recycled to profit or loss. The Company has no debt instruments at FVOCI. Financial assets designated at FVOCI (equity instruments) Upon initial recognition, the Company can elect to classify irrevocably its equity investments as financial assets at FVOCI when they meet the definition of equity under PAS 32, Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in the statement of income when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Financial assets at FVOCI are not subject to impairment assessment. The Company elected to classify irrevocably its listed equity investments under this category (Note 7).

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Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of income. The Company has no financial assets at fair value through profit or loss. A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset at fair value through profit or loss. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Company’s statement of financial position) when: • the rights to receive cash flows from the asset have expired, or, • the Company has transferred its rights to receive cash flows from the asset or has assumed an

obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Company also recognized an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

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Modification of contractual cash flows When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the derecognition of that financial asset, the Company recalculates the gross carrying amount of the financial asset as the present value of the renegotiated or modified contractual cash flows discounted at the original EIR (or credit-adjusted EIR for purchased or originated credit-impaired financial assets) and recognizes a modification gain or loss in the statement of comprehensive income.

When the modification of a financial asset results in the derecognition of the existing financial asset and the subsequent recognition of the modified financial asset, the modified asset is considered a ‘new’ financial asset. Accordingly, the date of the modification shall be treated as the date of initial recognition of that financial asset when applying the impairment requirements to the modified financial asset. Impairment of financial assets The Company recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For installment contract receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. b. Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include accounts payable and accrued expenses.

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Subsequent measurement The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments that are not designated as hedging instruments in hedge relationships as defined by PFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the statement of income. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in PFRS 9 are satisfied. The Company has not designated any financial liability as at fair value through profit or loss. Loans and borrowings This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of income. This category generally applies to interest-bearing loans and borrowings.

Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original EIR, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortized over the remaining term of the modified liability. c. Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

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Real Estate Properties for Sale and Real Estate Properties Held for Future Development Property acquired or being constructed for sale in the ordinary course of business and held for future development, rather than to be held for rental or capital appreciation, is classified as real estate properties for sale and real estate properties held for future development and are measured at the lower of cost and net realizable value (NRV). Cost includes: • Land cost • Amounts paid to contractors for construction • Borrowing costs directly attributable to the acquisition, development and construction of real

estate projects • Planning and design costs, costs of site preparation, professional fees, property transfer taxes,

construction overheads and other related costs. NRV is the estimated selling price in the ordinary course of the business, based on market prices at the reporting date, less estimated costs to complete and the estimated costs necessary to make the sale. The Company recognizes the effect of revisions in the total project cost estimates in the year in which these changes become known. Upon commencement of development, the real estate properties held for future development is transferred to real estate properties for sale. Upon repossession, real estate properties for sale arising from sale cancellations and forfeitures are measured at fair value less estimated costs to make the sale. Any resulting gain or loss is credited or charged to “Other income - net” in the statement of income. Investment Properties Investment properties which represent real estate properties for lease are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of the property. The carrying values of revalued properties transferred to investment properties on January 1, 2004 were considered as the assets’ deemed cost as of said date. Subsequent to initial measurement, investment properties, except land, are carried at cost less accumulated depreciation and amortization and any impairment in value. Land is carried at cost less any impairment in value. Investment properties are derecognized when either they have been disposed of or when the property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of investment properties are recognized in the statement of income in the year of retirement or disposal. Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owner-occupation, commencement of an operating lease to another party, or ending of construction or development. Transfers are made from investment properties when, and only when, there is a change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale.

Transfers between investment properties, owner-occupied property and inventories do not change the carrying amount of the property transferred and they do not change the cost of that property for measurement or disclosure purposes.

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Impairment of Nonfinancial Assets The carrying values of investment properties are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable. If any such indication exists and where the carrying value exceeds the estimated recoverable amount, the assets are either written down to their recoverable amount or provided with valuation allowance. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value-in-use. Impairment losses, if any, are recognized in the statement of income. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. The Company assesses at each reporting period whether there is an indication that previously recognized impairment losses may no longer exist or may have decreased. The Company considers external and internal sources of information in its assessment of the reversal of previously recognized impairment losses. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of income. After such a reversal, the depreciation is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. Value-added Tax (VAT) Revenues, expenses, assets and liabilities are recognized net of the amount of VAT, except where the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the VAT is recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable. When VAT from sales of goods and/or services (output VAT) exceeds VAT passed on from purchases of goods or services (input VAT), the excess is recognized as payable in the statements of financial position. When VAT passed on from purchases of goods or services (input VAT) exceeds VAT from sales of goods and/or services (output VAT), the excess is recognized as an asset in the statement of financial position to the extent of the recoverable amount. The net amount of VAT recoverable from or payable to, the taxation authority is included as part of “Other current assets” or “Accounts payable and accrued expenses,” respectively, in the statement of financial position.

Capital Stock Capital stock is measured at par value for all shares issued and outstanding. When the Company issues more than one class of stock, a separate account is maintained for each class of stock and the number of shares issued. Incremental costs incurred directly attributable to the issuance of new shares are shown in equity as a deduction from proceeds, net of tax. When the shares are sold at premium, the difference between the proceeds and the par value is credited to the “Additional paid-in capital” account. When shares are issued for a consideration other than cash, the proceeds are measured by the fair value of the consideration received. In case the shares are issued to extinguish or settle the liability of the Company, the shares shall be measured either at the fair value of the shares issued or fair value of the liability settled, whichever is more reliably determinable.

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Retained Earnings Retained earnings represent the cumulative balance of net income or loss, dividend distributions, effects of the changes in accounting policy and other capital adjustments. The retained earnings include deemed cost adjustment on land recorded under “Investment properties” that arose when the Company transitioned to PFRSs in 2005. The deemed cost adjustment will be realized through sale. The deferred income tax liability on the deemed cost adjustment is transferred to the statement of income upon sale. Dividend Distributions Cash dividends on common shares are deducted from retained earnings upon declaration by the BOD. Stock dividends on common shares are measured based on the total par value of declared stock dividend. Stock dividends are deducted from retained earnings when the BOD’s declaration is ratified by the stockholders of the Company. Unissued stock dividends are recorded as stock dividends distributable and credited to capital stock upon issuance. Dividends for the year that are declared after the end of the reporting period but before the approval for issuance of financial statements are dealt with as an event after the reporting period. Treasury shares Own equity instruments that are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognized in the share premium. Revenue Recognition Revenue from Contracts with Customers The Company primarily derives its real estate revenue from the sale of real estate projects and undeveloped land. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, except for the provisioning of water, electricity, air-conditioning and common use service area in its office leasing activities, wherein it is acting as agent. The disclosures of significant accounting judgments, estimates and assumptions relating to revenue from contracts with customers are provided in Note 3. Sales of real estate properties The Company derives its real estate revenue from sale of lots and condominium units. Revenue from the sale of these real estate projects under pre-completion stage are recognized over time during the construction period (or percentage of completion) since based on the terms and conditions of its contract with the buyers, the Company’s performance does not create an asset with an alternative use and the Company has an enforceable right to payment for performance completed to date. In measuring the progress of its performance obligation over time, the Company uses input method. Input methods recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation. Progress is measured based on actual resources consumed such as materials, labor hours expended and actual overhead incurred relative to the total expected inputs to the satisfaction of that performance obligation, or the total estimated development costs of the real estate project. The Company uses the costs accumulated by the accounting department to determine the actual resources used. Input method excludes the effects

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of any inputs that do not depict the entity’s performance in transferring control of goods or services to the customer.

Estimated development costs of the real estate project include costs of land, land development, building costs, professional fees, depreciation of equipment directly used in the construction, payments for permits and licenses. Revisions in estimated development costs brought about by increases in projected costs in excess of the original budgeted amounts, form part of total project costs on a prospective basis. Any excess of progress of work over the right to an amount of consideration is recognized as installment contract receivables (unconditional) or contract asset (conditional) in the asset section of the statement of financial position. Any excess of collections over the total of recognized installment contract receivables is included in the “Contract liabilities” account in the liabilities section of the statement of financial position. Cost recognition The Company recognizes costs relating to satisfied performance obligations as these are incurred. These include costs of land, land development costs, building costs, professional fees, depreciation, permits and licenses and capitalized borrowing costs. These costs are allocated to the saleable area, with the portion allocable to the sold area being recognized as costs of sales while the portion allocable to the unsold area being recognized as part of real estate inventories. In addition, the Company recognizes as an asset only costs that give rise to resources that will be used in satisfying performance obligations in the future and that are expected to be recovered. Contract Balances Receivables A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration that is conditional.

Contract liabilities A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs its obligations under the contract. The contract liabilities also include payments received by the Company from the customers for which revenue recognition has not yet commenced.

Costs to obtain contract The incremental costs of obtaining a contract with a customer are recognized as an asset if the Company expects to recover them. The Company has determined that commissions paid to sales personnel on the sale of pre-completed real estate units are deferred when recovery is reasonably expected and are charged to expense in the period in which the related revenue is recognized as earned. Commission expense is included in the “Operating expenses” account in the statement of income.

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Costs incurred prior to obtaining contract with customer are not capitalized but are expensed as incurred. Amortization and derecognition of capitalized costs to obtain a contract The Company amortizes capitalized costs to obtain a contract to cost of sales over the expected construction period using percentage of completion following the pattern of real estate revenue recognition. The amortization is included within operating expenses.

Capitalized costs to obtain a contract is derecognized either when it is disposed of or when no further economic benefits are expected to flow from its use or disposal. Interest income Interest income from cash in banks, cash equivalents, short-term investments, installment contracts receivable and contract assets is recognized as the interest accrues taking into account the effective yield on interest.

Dividend income Dividend income is recognized when the Company’s right to receive the payment is established. Leases The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Short-term leases and leases of low-value assets The Company applies the short-term lease recognition exemption to its short-term leases of office space and transportation equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the leases of low-value assets recognition exemption to leases of office equipment that are considered of low value. The Company does not have any lease of low-value assets. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. Company as a lessor Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

Lease modification Lease modification is defined as a change in the scope of a lease, or the consideration for a lease, that was not part of the original terms and conditions of the lease e.g., addition or termination of the right to use one or more underlying assets, or the extension or shortening of the contractual lease term.

In case of a lease modification, the lessor shall account for any such modification by recognizing a new lease from the effective date of the modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease payments for the new lease. In case of change in lease payments for an operating lease that does not meet the definition of a lease modification, the lessor shall account for any such change as a negative variable lease payment and recognize lower lease income.

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Operating expenses Operating expenses constitute costs of administering the business. These costs are expensed as incurred. Financial expenses Financial expenses consist of interest incurred on notes payable. Interest attributable to a qualifying asset is capitalized as part of the cost of the asset while others are expensed as incurred. Interest costs are capitalized if they are directly attributable to the acquisition, development and construction of real estate projects as part of the cost of such projects. Capitalization of interest cost (1) commences when the activities to prepare the assets for their intended use are in progress and expenditures and interest costs are being incurred, (2) is suspended during extended periods in which active development is interrupted, and (3) ceases when substantially all the activities necessary to prepare the assets for their intended use are complete. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recorded. Other income - net Net other income pertains mainly to the gain or loss arising from forfeiture or cancellation of prior years’ real estate sales arising from the difference between the outstanding balance of receivables and the original cost of the inventories. Retirement Benefits Cost The net defined benefit liability or asset is the aggregate of the present value of the defined benefit obligation at the end of the reporting period reduced by the fair value of plan assets (if any), adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The cost of providing benefits under the defined benefit plans is actuarially determined using the projected unit credit method. Retirement benefits cost comprises the following: • Service cost • Net interest on the net defined benefit liability or asset • Re-measurements of net defined benefit liability or asset Service costs which include current service costs, past service costs and gains or losses on non-routine settlements are recognized as expense in the statement of income. Past service costs are recognized when plan amendment or curtailment occurs. These amounts are calculated periodically by independent qualified actuary. Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit liability or asset that arises from the passage of time which is determined by applying the discount rate based on government bonds to the net defined benefit liability or asset. Net interest on the net defined benefit liability or asset is recognized as expense or income in the statement of income. Re-measurements comprising actuarial gains and losses, return on plan assets and any change in the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognized immediately in the statement of comprehensive income in the period in which they arise. Re-measurements are not reclassified to profit or loss in subsequent periods.

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Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the creditors of the Company, nor can they be paid directly to the Company. Fair value of plan assets is based on market price information. When no market price is available, the fair value of plan assets is estimated by discounting expected future cash flows using a discount rate that reflects both the risk associated with the plan assets and the maturity or expected disposal date of those assets (or, if they have no maturity, the expected period until the settlement of the related obligations). If the fair value of the plan assets is higher than the present value of the defined benefit obligation, the measurement of the resulting defined benefit asset is limited to the present value of economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The Company’s right to be reimbursed of some or all of the expenditure required to settle a defined benefit obligation is recognized as a separate asset at fair value when and only when reimbursement is virtually certain. Employee leave entitlement

Employee entitlements to annual leave are recognized as a liability when they are earned by the employees. The undiscounted liability for leave expected to be settled within 12 months after the end of the reporting period is recognized for services rendered by employees up to the end of the reporting period. Accumulating leave credits which can be utilized anytime when needed or converted to cash upon employee separation (i.e., resignation or retirement) are presented at its discounted amount as “Accounts payable and accrued expenses - noncurrent portion” account in the statement of financial position.

Provisions and Contingencies Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of income net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the effective future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provisions due to the passage of time is recognized as an interest expense. Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognized in the financial statements but disclosed in the notes to financial statements when an inflow of economic benefits is probable. Income Taxes Current income tax Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of reporting period. Current income tax for current and prior periods shall, to the extent unpaid, be recognized as a liability under “Income tax payable” account in the statement of financial position. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess shall be recognized as an asset under “Prepaid tax” account in the statement of financial position.

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Deferred income tax Deferred income tax is recognized on all temporary differences at the end of reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognized for all taxable temporary differences. Deferred income tax assets are recognized for all deductible temporary differences to the extent that it is probable that sufficient future taxable profits will be available against which the deductible temporary differences can be utilized. Deferred income tax assets and deferred income tax liabilities are not recognized when it arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. The carrying amount of deferred income tax assets is reviewed at each end of reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred income tax assets to be utilized. Unrecognized deferred income tax assets are reassessed at each end of reporting period and are recognized to the extent that it has become probable that sufficient future taxable profits will allow the deferred income tax asset to be recovered. Deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized, or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end of reporting period. Deferred income tax relating to items recognized directly in equity is recognized in equity and those directly in comprehensive income such as re-measurement of defined benefit plan are recognized in the statement of comprehensive income and not in the statement of income. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to offset current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Other Comprehensive Income Other comprehensive income comprises items of income and expense that are not recognized in the statement of income in accordance with PFRSs. Other comprehensive income of the Company includes gains and losses on fair value changes of financial assets/available-for-sale financial assets, remeasurements comprising actuarial gains and losses, return on plan assets and any change in the effect of the asset ceiling (excluding net interest on defined benefit liability). Earnings Per Share Basic earnings per share is computed by dividing the net income for the year by the weighted average number of ordinary shares issued and outstanding after considering the retrospective effect, if any, of stock dividends declared during the year. Diluted earnings per share is calculated by dividing the net income for the year by the weighted average number of ordinary shares outstanding during the year, excluding treasury shares, and adjusted for the effects of all dilutive potential common shares, if any. In determining both the basic and diluted earnings per share, the effect of stock dividends, if any, is accounted for retrospectively. Segment Reporting The Company’s operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. Financial information on business

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segments is presented in Note 24 in the financial statements. The Company’s asset-producing revenues are located in the Philippines (i.e., one geographical location). Therefore, geographical segment information is no longer presented.

Events After the Reporting Period Post year-end events that provide additional information about the Company’s financial position at the end of reporting period (adjusting events) are reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to the financial statements when material. Standards Issued but not yet Effective Pronouncements issued but not yet effective are listed below. Unless otherwise indicated, the Company does not expect that the future adoption of the said pronouncements will have a significant impact on its financial statements. The Company intends to adopt the following pronouncements when they become effective.


• Amendments to PFRS 3, Reference to the Conceptual Framework

The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements. The amendments added an exception to the recognition principle of PFRS 3, Business Combinations to avoid the issue of potential ‘day 2’gains or losses arising for liabilities and contingent liabilities that would be within the scope of PAS 37, Provisions, Contingent Liabilities and Contingent Assets or Philippine-IFRIC 21, Levies, if incurred separately. At the same time, the amendments add a new paragraph to PFRS 3 to clarify that contingent assets do not qualify for recognition at the acquisition date. The amendments are effective for annual reporting periods beginning on or after January 1, 2022 and apply prospectively. The amendments will not significantly affect the Company’s financial statements.

• Amendments to PAS 16, Plant and Equipment: Proceeds before Intended Use The amendments prohibit entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the costs of producing those items, in profit or loss. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The amendments are not expected to have a material impact on the Company.

• Amendments to PAS 37, Onerous Contracts – Costs of Fulfilling a Contract

The amendments specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making. The amendments apply a “directly related cost approach”.

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The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract. The amendments are effective for annual reporting periods beginning on or after January 1, 2022. The Company will apply these amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the amendments. The amendments are not expected to have a material impact on the Company.

• Annual Improvements to PFRSs 2018-2020 Cycle o Amendments to PFRS 1, First-time Adoption of Philippines Financial Reporting

Standards, Subsidiary as a first-time adopter The amendment permits a subsidiary that elects to apply paragraph D16(a) of PFRS 1 to measure cumulative translation differences using the amounts reported by the parent, based on the parent’s date of transition to PFRS. This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of PFRS 1. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 with earlier adoption permitted. The amendments are not expected to have a material impact on the Company.

o Amendments to PFRS 9, Financial Instruments, Fees in the ‘10 per cent’ test for derecognition of financial liabilities The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 with earlier adoption permitted. The Company will apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendments are not expected to have a material impact on the Company.

o Amendments to PAS 41, Agriculture, Taxation in fair value measurements The amendment removes the requirement in paragraph 22 of PAS 41 that entities exclude cash flows for taxation when measuring the fair value of assets within the scope of PAS 41. An entity applies the amendment prospectively to fair value measurements on or after the beginning of the first annual reporting period beginning on or after January 1, 2022 with earlier adoption permitted. The amendments are not expected to have a material impact on the Company.

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Effective beginning on or after January 1, 2023 • Amendments to PAS 1, Classification of Liabilities as Current or Non-current

The amendments clarify paragraphs 69 to 76 of PAS 1, Presentation of Financial Statements, to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

o What is meant by a right to defer settlement o That a right to defer must exist at the end of the reporting period o That classification is unaffected by the likelihood that an entity will exercise its

deferral right o That only if an embedded derivative in a convertible liability is itself an equity

instrument would the terms of a liability not impact its classification The amendments are effective for annual reporting periods beginning on or after January 1, 2023 and must be applied retrospectively. The Company is currently assessing the impact the amendments will have on its current practice and whether existing loan agreements may require renegotiation.

• PFRS 17, Insurance Contracts

PFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, PFRS 17 will replace PFRS 4, Insurance Contracts. This new standard on insurance contracts applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few scope exceptions will apply. The overall objective of PFRS 17 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the requirements in PFRS 4, which are largely based on grandfathering previous local accounting policies, PFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. The core of PFRS 17 is the general model, supplemented by:

o A specific adaptation for contracts with direct participation features (the variable fee approach)

o A simplified approach (the premium allocation approach) mainly for short-duration contracts

PFRS 17 is effective for reporting periods beginning on or after January 1, 2023, with comparative figures required. Early application is permitted. PFRS 17 will affect the Company if it enters insurance contracts in the future.

Deferred effectivity

• Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or

Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that a full gain or loss is recognized when a transfer to an associate or joint venture involves a business as defined in PFRS 3. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business, however, is recognized only to the extent of unrelated investors’ interests in the associate or joint venture.

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On January 13, 2016, the FRSC deferred the original effective date of January 1, 2016 of the said amendments until the International Accounting Standards Board (IASB) completes its broader review of the research project on equity accounting that may result in the simplification of accounting for such transactions and of other aspects of accounting for associates and joint ventures. The amendments are not expected to affect the Company’s financial statements.

• Deferral of Certain Provisions of PIC Q&A 2018-12, PFRS 15 Implementation Issues Affecting the Real Estate Industry (as amended by PIC Q&As 2020-02 and 2020-04) On February 14, 2018, the PIC issued PIC Q&A 2018-12 (PIC Q&A) which provides guidance on some implementation issues of PFRS 15 affecting real estate industry. On October 25, 2018 and February 8, 2019, the Philippine SEC issued SEC Memorandum Circular No. 14, Series of 2018, and SEC Memorandum Circular No. 3, Series of 2019, respectively, providing relief to the real estate industry by deferring the application of the following provisions of the above PIC Q&A for a period of 3 years until December 31, 2020. On December 15, 2020, the Philippine SEC issued SEC Memorandum Circular No. 34, Series of 2020, which further extended the deferral of certain provisions of this PIC Q&A until December 31, 2023. A summary of the PIC Q&A provisions covered by the SEC deferral follows: Deferral Period 1. Assessing if the transaction price includes a significant

financing component as discussed in PIC Q&A 2018-12-D (as amended by PIC Q&A 2020-04)


2. Treatment of land in the determination of the POC discussed in PIC Q&A 2018-12-E


3. Treatment of uninstalled materials in the determination of the POC discussed in PIC Q&A 2018-12-E (as amended by PIC Q&A 2020-02)


4. Accounting for CUSA Charges discussed in PIC Q&A No. 2018-12-H


In November 2020, the PIC issued the following Q&As which provide additional guidance on the real estate industry issues covered by the above SEC deferrals: • PIC Q&A 2020-04 on determining whether the transaction price includes a significant

financing component. • PIC Q&A 2020-02 on determining which uninstalled materials should not be included in

calculating the POC.

After the deferral period, real estate companies would have to adopt PIC Q&A No. 2018-12 and any subsequent amendments thereto retrospectively or as the SEC shall later prescribe.

The Company availed of the option to defer adoption of the above specific provisions except for land exclusion in the determination of POC. Had these provisions been adopted, it would have impacted retained earnings, revenue from real estate sales, cost of real estate sold, other income and real estate inventories.

• IFRIC Agenda Decision on Over Time Transfer of Constructed Good (PAS 23, Borrowing Costs) In March 2019, IFRIC published an Agenda Decision on whether borrowing costs can be capitalized on real estate inventories that are under construction and for which the related

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revenue is recognized over time under paragraph 35(c) of IFRS 15 (PFRS 15). IFRIC concluded that borrowing costs cannot be capitalized for such real estate inventories as they do not meet the definition of a qualifying asset under PAS 23, Borrowing Costs, considering that these inventories are ready for their intended sale in their current condition.

On February 11, 2020, the Philippine SEC issued Memorandum Circular No. 4, Series of 2020, providing relief to the real estate industry by deferring the mandatory implementation of the above IFRIC Agenda Decision until December 31, 2020. Further, on December 15, 2020, the Philippine SEC issued SEC MC No. 34, Series of 2020, which extends the relief on the application of the IFRIC Agenda Decision provided to the real estate industry until December 31, 2023. Effective January 1, 2024, the real estate industry will adopt the IFRIC Agenda Decision and any subsequent amendments thereto retrospectively or as the SEC will later prescribe. A real estate company may opt not to avail of the deferral and instead comply in full with the requirements of the IFRIC Agenda Decision.

The Company opted to avail of the relief as provided by the SEC. The adoption of the IFRIC Agenda Decision is not expected to have significant impact on the financial statements.

• Deferral of PIC Q&A 2018-14, Accounting for Cancellation of Real Estate Sales (as amended by PIC Q&A 2020-05)

On June 27, 2018, PIC Q&A 2018-14 was issued providing guidance on accounting for cancellation of real estate sales. Under SEC Memorandum Circular No. 3, Series of 2019, the adoption of PIC Q&A No. 2018-14 was deferred until December 31, 2020. After the deferral period, real estate companies will adopt PIC Q&A No. 2018-14 and any subsequent amendments thereto retrospectively or as the SEC shall later prescribe.

On November 11, 2020, PIC Q&A 2020-05 was issued which supersedes PIC Q&A 2018-14. This PIC Q&A adds a new approach where the cancellation is accounted for as a modification of the contract (i.e., from non-cancellable to being cancellable). Under this approach, revenues and related costs previously recognized shall be reversed in the period of cancellation and the inventory shall be reinstated at cost. PIC Q&A 2020-05 shall have to be applied prospectively from approval date of the Financial Reporting Standards Council which was November 11, 2020.

The Company availed of the SEC relief to defer the adoption of this PIC Q&A until December 31, 2020. The adoption of this PIC Q&A is not expected to have significant impact on the financial statements. As prescribed by SEC Memorandum Circular No. 34, Series of 2020, for financial reporting periods beginning on or after January 1, 2021, the availment of the above deferral will impact the Company’s financial reporting during the period of deferral.

3. Significant Accounting Judgments, Estimates and Assumptions

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. In the opinion of management, these financial statements reflect all adjustments necessary to present fairly the results for the periods presented. Actual results could differ from such estimates.

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Judgments In the process of applying the Company’s accounting policies, management has made the following judgments, apart from those involving estimations, which has the most significant effect on the amounts recognized in the financial statements: Revenue recognition upon adoption of PFRS 15 Selecting the appropriate revenue recognition method for a particular real estate transaction requires certain judgments based on the following, among others: • Existence of a contract The Company’s primary document for a contract with a customer is a signed contract to sell.

It has determined however, that in cases wherein contract to sell are not signed by both parties, the combination of other signed documentation such as reservation agreement, official receipts and other documents, would contain all the criteria to qualify as contract with the customer under PFRS 15.

In addition, part of the assessment process of the Company before revenue recognition is to

assess the probability that the Company will collect the consideration to which it will be entitled in exchange for the real estate property that will be transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, an entity considers whether the customer has met the required down payment in relation to the total contract price. Collectability is also assessed by considering factors such as the credit standing and financial capacity of the buyer, age and location of the property. Management regularly evaluates the historical cancellations and back-outs if it would still support its current threshold of customers’ equity before commencing revenue recognition.

• Revenue recognition method and measure of progress

The Company concluded that revenue for real estate sales is to be recognized over time because (a) the Company’s performance does not create an asset with an alternative use and; (b) the Company has an enforceable right for performance completed to date. The promised property is specifically identified in the contract and the contractual restriction on the Company’s ability to direct the promised property for another use is substantive. This is because the property promised to the customer is not interchangeable with other properties without breaching the contract and without incurring significant costs that otherwise would not have been incurred in relation to that contract. In addition, under the current legal framework, the customer is contractually obliged to make payments to the developer up to the performance completed to date.

The Company has determined that input method used in measuring the progress of the performance obligation faithfully depicts the Company’s performance in transferring control of real estate development to the buyers.

• Identifying performance obligation The Company has various contracts to sell covering sale of condominium units and other real estate properties. The Company concluded that there is one performance obligation in each of these contracts. For the contract covering condominium unit, the developer has the obligation to deliver the condominium unit duly constructed in a specific lot and fully integrated into the serviced land in accordance with the approved plan. For the sale of real estate properties such as raw land, the Company integrates certain activities to the said property to be able to deliver the property based on the contract with the buyer. Included also in this performance obligation is the Company’s service to transfer the title of the real estate unit to the customer.

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• Principal versus agent considerations The contract for the office spaces and condominium units leased out by the Company to its tenants includes the right to charge for the electricity and water usage. For the electricity and water usage, the Company determined that it is acting as an agent because the promise of the Company to the tenants is to arrange for the electricity and water supply to be provided by a utility company. The utility company, and not the real estate developer, is primarily responsible for the provisioning of the utilities while the Company, administers the leased spaces and coordinates with the utility companies to ensure that tenants have access to these utilities. The Company does not have the discretion on the pricing of the services provided since the price is based on the actual rate charged by the utility providers.

Distinction between investment properties and owner-occupied properties The Company determines whether a property qualifies as investment property. In making its judgment, the Company considers whether the property generates cash flows largely independent of the other assets held by an entity. Owner-occupied properties generate cash flows that are attributable not only to the property but also to the other assets used for administrative purposes.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use for administrative purposes. If these portions cannot be sold separately at the reporting date, the property is accounted for as investment property only if an insignificant portion is held for administrative purposes. Judgment is applied in determining whether ancillary services are so significant that a property does not qualify as investment property. The Company considers each property separately in making its judgment. Investment properties amounted to P=181.14 million as of March 31, 2021 and December 31, 2020 (see Note 9). Distinction between real estate properties for sale and investment properties The Company determines whether a property is classified as for sale, for lease or for capital appreciation. Real estate properties which the Company develops and intends to sell on or before completion of construction are classified as real estate properties for sale. Real estate properties for sale amounted to P=1,172.31 million and P=1,138.43 million as of March 31, 2021 and December 31, 2020, respectively (see Note 8). Real estate properties which are not occupied substantially for use by, or in the operations of the Company, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation are classified as investment properties. Investment properties amounted to P=181.14 million as of March 31, 2021 and December 31, 2020 (see Note 9). Distinction between real estate properties for sale and held for future development The Company determines whether a property will be classified as real estate properties for sale or held for future development. In making this judgment, the Company considers whether the property will be sold in the normal operating cycle (real estate properties for sale) or whether it will be retained as part of the Company’s strategic land banking activities for development or sale in the medium or long-term (real estate properties held for future development). Real estate properties for sale amounted to P=1,172.31 million and P=1,138.43 million as of March 31, 2021 and December 31, 2020, respectively (see Note 8). Real estate properties held for future development amounted to P=517.58 million and P=494.36 million as of March 31, 2021 and December 31, 2020, respectively (see Note 8).

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Estimates The key assumptions concerning the future and other key sources of estimation uncertainty at the end of reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Revenue recognition upon adoption of PFRS 15 - Revenue recognition method and measure of progress The measurement of progress for revenue recognition requires management to make use of estimates and assumptions. The Company’s real estate sales is based on the percentage-of-completion method measured principally on the basis of total actual cost of resources consumed such as materials, labor hours expended and actual overhead incurred over the total estimated development cost of the project. Estimated development costs of the project include costs of land, land development, building costs, professional fees, depreciation of equipment directly used in the construction, payments for permits and licenses. The estimated development cost is prepared by the Company’s project engineers and are independently reviewed by the Company’s third party independent project engineers. Revisions in estimated development costs brought about by increases in projected costs in excess of the original budgeted amounts, form part of total project costs on a prospective basis and is allocated between costs of sales and real estate inventories.

Estimation of POC of real estate projects The Company estimates the POC of ongoing projects for purposes of accounting for the estimated costs of development as well as revenue to be recognized. Actual costs of development could differ from these estimates. Such estimates will be adjusted accordingly when the effects become reasonably determinable. The POC is based on the technical evaluation of the independent project engineers as well as management’s monitoring of the costs, progress and improvements of the projects. Gross profit on sales of real estate properties amounted to P=37.71 million and P=34.17 million as of March 31, 2021 and March 31 2020, respectively.

Provision for expected credit losses of installment contract receivables and contract assets - Effective starting January 1, 2018 The Company uses a provision matrix to calculate ECLs for installment contract receivables and contract assets. The provision rates are based on past collection history and other factors, which include, but are not limited to the length of the Company’s relationship with the customer, the customer’s payment behavior, known market factors that affect the collectability of the accounts. The provision matrix is initially based on the Company’s historical observed default rates. The Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information such as the inflation rate, gross domestic product, interest rate and unemployment rate. For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the real estate sector, the historical default rates are adjusted. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed. The assessment of the correlation between historical observed default rates, forecast economic conditions such as inflation rate, gross domestic product, interest rate and unemployment rate and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Company’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. The information about the ECLs on the Company’s installment contract receivables and contract assets is disclosed in Note 23. As of March 31, 2021 and December 31, 2020, installment contracts receivable, contract assets and other receivables aggregated to P=412.58 million and P=413.59 million, respectively. There was no provision for expected credit loss on receivables in first quarter of 2021 and 2020 (see Notes 5 and 6).

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Revenue and cost recognition The Company’s revenue recognition and cost policies require management to make use of estimates and assumptions that may affect the reported amount of revenue and cost. The Company’s revenue from real estate properties based on the POC is measured principally on the basis of the estimated completion of a physical proportion of the contract work.

Determination of net realizable value of real estate properties for sale and held for future development The Company’s estimates of the net realizable value of real estate properties for sale and held for future development are based on the most reliable evidence available at the time the estimates are made, or the amount that the real estate properties for sale and held for future development are expected to be realized. These estimates consider the fluctuations of price or cost directly relating to events occurring after the end of the reporting period to the extent that such events confirm conditions existing at the end of the period. A new assessment is made of net realizable value in each subsequent period. When the circumstances that previously caused the real estate properties for sale and held for future development to be written down below cost no longer exist or when there is a clear evidence of an increase in net realizable value because of changes in economic circumstances, the amount of the write-down is reversed so that the new carrying amount is the lower of the cost and the revised net realizable value. The Company’s real estate properties for sale amounted to P=1,172.31 million and P=1,138.43 million as of March 31, 2021 and December 31, 2020, respectively (see Note 8). Real estate properties held for future development amounted to P=517.58 million and P=494.36 million as of March 31, 2021 and December 31, 2020, respectively (see Note 8). Determination of the fair value of investment properties The Company discloses the fair values of its investment properties in accordance with PAS 40, Investment Property. The Company engaged SEC-accredited independent valuation specialists to determine the fair value as of December 31, 2020 and 2019. The Company’s investment properties consist of land and building pertaining to commercial properties. These are valued by reference to sales of similar or substitute properties and other related market data had the investment properties been transacted in the market. The significant unobservable inputs used in determining the fair value are the sales price per square meter of similar or substitute property, location, size, shape of lot and the highest and best use. Another method used in determining the fair value of land properties is based on the market data approach. The value of land is based on sales and listings of comparable property registered within the vicinity. This requires adjustments of comparable property by reducing reasonable comparative sales and listings to a common denominator by adjusting the difference between the subject property and those actual sales and listings regarded as comparables. The comparison is premised on the factors of location; size and shape of the lot; time element and others (see Note 23). Determination of impairment indication on investment properties The Company determines whether its nonfinancial assets such as investment properties are impaired when impairment indicators exist such as significant underperformance relative to expected historical or projected future operating results and significant negative industry or economic trends. When an impairment indicator is noted, the Company makes an estimation of the value-in-use of the cash-generating units to which the assets belong. Estimating the value-in-use requires the Company to make an estimate of the expected future cash flows from the cash-generating unit and also to choose an appropriate discount rate in order to calculate the present value of those cash flows. No impairment indicator was noted as of March 31, 2021 and December 31, 2020. Net book values of investment properties as of March 31, 2021 and December 31, 2020 amounted to P=181.14 million (see Note 9).

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Estimation of retirement benefits cost The cost of the defined benefit plan and the present value of the defined benefit obligation are determined using actuarial valuations which involves making various assumptions that may differ from actual developments in the future. These assumptions include the determination of the discount rate, future salary increases, mortality rates, and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the various tenors, rates for intermediate durations were interpolated and the rates were then weighted by the expected benefits payments at those durations to arrive at the single weighted average discount rate.

Recognition of deferred income tax assets The Company reviews the carrying amounts of deferred income tax assets at the end of each reporting period and reduces deferred income tax assets to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred income tax assets to be utilized.

4. Cash and Cash Equivalents and Short-term Investments Cash and cash equivalents consist of:

March 31, 2021 December 31, 2020 Cash on hand and in banks P=7,132,833 P=28,806,738 Cash equivalents 229,500,000 149,502,800 P=236,632,833 P=178,309,538

Cash in banks earn interest at the respective bank deposit rates. Cash equivalents are made for varying periods of up to three months depending on the immediate cash requirements of the Company and earn interest at the respective short-term investment rates. Short-term investments amounting to nil and P=58.50 million as of March 31, 2021 and December 31, 2020, respectively have maturities of more than three months to one year from the date of acquisition and earn interest at the prevailing market rates. Interest income earned from cash in banks, cash equivalents and short-term investments amounted to P=0.93 million and P=2.34 million as of March 31, 2021 and March 31, 2020, respectively.

5. Revenue from Contracts with Customers

a. Disaggregated Revenue Information

The Company derives revenue from real estate sales over time in different product types. The disaggregation of each sources of revenue from contracts with customers are as follows:

Type of Product March 31, 2021 March 31, 2020 Medium-rise condominium units P=127,038,844 P=68,441,768 Parking slots 2,395,597 4,653,036 Total P=129,434,441 P=73,094,804 Real estate sales of the Company pertain to sale of properties within Metro Manila for the quarter ended March 31, 2021 and 2020. All of the Company’s real estate sales are revenue

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from contracts with customers recognized over time. In 2021 and 2020, sales for real estate properties and rental income arose from contracts with external customers. There were no intercompany sales/transactions made on the said quarters.

Contract Balances

March 31, 2021 December 31, 2020 Installment contracts receivable P=1,282,382 P=1,765,893 Contract asset Current 19,239,060 45,757,086 Noncurrent 387,855,598 362,442,313 Contract liabilities Current 75,439,315 74,415,683 Noncurrent 32,026,756 50,931,630

Installment contracts receivable arise from sales of real estate properties and are collectible in monthly installments for periods ranging from one (1) to 10 years which bears monthly interest rates of 0.92% to 1.46% in March 31, 2021 and December 31, 2020 computed on the diminishing balance. The Company, CI and CDC (collectively known as the Group) entered into a contract of guaranty under Retail Guaranty Line with Home Guaranty Corporation (HGC). The amount of installment contracts receivable enrolled and renewed by the Company amounted to P=293.00 million as of March 31, 2021 and December 31, 2020. The Company paid a guaranty premium of 1.00% based on the outstanding principal balances of the receivables enrolled (see Note 17). Contract assets represent the right to consideration that was already delivered by the Company in excess of the amount recognized as installment contracts receivable. This is reclassified as installment contracts receivable when the monthly amortization of the buyer is already due for collection. In September 2019, PIC issued additional guidance to the real estate industry on the implementation of PFRS 15, including guidance on the recording of the difference between the consideration received from the buyer and the transferred goods to the buyer (i.e., measured based on percentage-of-completion). The PIC allowed real estate companies to recognize the difference as either a contract asset or unbilled receivable. If presented as a contract asset, the disclosures required under PFRS 15 should be complied with. Otherwise, the disclosures required under PFRS 9 should be provided. The Company opted to retain its existing policy of recording the difference between the consideration received from the buyer and the transferred goods to the buyer as contract asset. Interest income earned from installment contracts receivable and contract assets amounted to P=17.37 million and P=18.83 million as of March 31, 2021 and March 31, 2020, respectively (see Note 15).

b. Performance Obligations

Information about the Company’s performance obligations are summarized below:

Real estate sales The Company entered into contracts to sell with one identified performance obligation which is the sale of the real estate unit together with the services to transfer the title to the buyer upon full payment of contract price. The amount of consideration indicated in the contract to sell is

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fixed and has no variable consideration.

The sale of real estate unit covers condominium unit and the Company concluded that there is one performance obligation in each of the contracts. The Company recognizes revenue from the sale of these real estate projects under pre-completed contract over time during the course of the construction.

Payment commences upon signing of the contract to sell and the consideration is payable in cash or under various financing schemes entered with the buyer. The financing scheme would include down payment of generally 5% to 10% of the contract price with the remaining balance payable through in-house financing which ranges from one (1) month to ten (10) years with fixed monthly payment. The amount due for collection under the amortization schedule for each of the buyer does not necessarily coincide with the progress of construction, which results to either a contract asset or contract liability.

In order to cope with the current trend in the real estate industry, the Company offered to customers the “installment down payment” scheme starting 2020 wherein certain projects were offered with 18 to 24 months to pay the corresponding down payment. The new scheme introduced by the Company resulted to sales with percentage of collection lower than 10%. The Company records these collections as “Customers’ deposits” under “Accounts Payable and Accrued Expenses” account in the statements of financial position.

The transaction price allocated to the remaining performance obligations (unsatisfied or partially satisfied) as at March 31, 2021 and December 31, 2020 are as follows:

March 31, 2021 December 31, 2020 Within one year P=119,933,082 P=125,504,737 More than one year 59,197,739 102,244,185

P=179,130,821 P=227,748,922

The remaining performance obligations expected to be recognized within one year and in more than one year relate to the continuous development of the Company’s real estate projects. The Company’s condominium units are generally completed within three to five years from start of construction.

c. Cost to obtain contract

The balances below pertain to the cost to obtain contracts as of March 31, 2021 and December 31, 2020 as presented in the statement of financial position:

March 31, 2021 December 31, 2020 Balance at beginning of year P=6,530,776 P=8,194,613 Additions 982,913 3,915,072 Amortization (2,184,102) (5,578,909) Balance at end of year 5,329,587 6,530,776 Less noncurrent portion 1,761,280 2,931,886 Current portion P=3,568,307 P=3,598,890

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6. Other Receivables

Other receivables consist of:

March 31,2021 December 31, 2020 Advances to customers P=2,053,558 P=1,160,192 Advances to condominium corporations 330,416 917,501 Rent receivable 265,327 269,499 Retention (Note 13) 830,000 810,000 Accrued interest 182,833 300,048 Due from related parties (Note 13) 465,326 – Others 78,834 165,573 4,206,295 3,622,813 Less noncurrent portion 1,426,160 1,406,160 Current portion P=2,780,134 P=2,216,653

Advances to customers are receivables of the Company for the real estate property taxes of sold condominium units initially paid by the Company while advances to condominium corporations pertain to disbursements which are collectible from condominium corporations. Retention pertains to the amount held on cash sale of real estate properties. Other receivables include receivables from customers relating to registration of title and other expenses initially paid by the Company on behalf of the buyers and employees’ advances.

7. Financial Assets at Fair Value through Other Comprehensive Income Financial assets at FVOCI consist of investments in quoted equity securities amounting to P=0.45 million and P=0.49 million as of March 31, 2021 and December 31, 2020, respectively in which the fair values were determined based on published prices in the active market. The movements in “Unrealized fair value change on financial assets at FVOCI” account presented in the equity section of the statements of financial position are as follows:

March 31, 2021 December 31, 2020 Balances at beginning of year P=398,463 P=392,077 Changes in fair value (47,757) 6,386 Balances at end of year P=350,706 P=398,463

8. Real Estate Properties for Sale and Real Estate Properties Held for Future Development Real estate properties for sale Real estate properties for sale consists of cost incurred in the development of condominium units and residential houses for sale.

The movements of real estate properties for sale are as follows:

March 31, 2021 December 31, 2020 Balances at beginning of year P=1,138,427,667 P=1,005,860,529 Construction/development costs incurred 116,285,826 249,120,524 Cost of real estate sales (91,717,668) (152,154,183) Other adjustments - net 9,317,321 35,600,797 Balances at end of year P=1,172,313,146 P=1,138,427,667

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Real estate properties for sale account includes capitalized borrowing costs incurred during each year in connection with the development of the properties. No interest was capitalized in 2020. Other adjustments include the effect of stating repossessed real estate properties fair value less cost to sell. Real estate properties held for future development Real estate properties held for future development include land properties reserved by the Company for its future condominium projects. Movements in real estate properties held for future development are as follows:

March 31, 2021 December 31, 2020 Balances at beginning of year P=494,356,932 P=491,809,557 Additions 23,224,350 2,547,375 Balances at end of year P=517,581,282 P=494,356,932

9. Investment Properties

Investment properties as of March 31, 2021 and December 31, 2020 represent the real estate properties for lease which consist of:

Land - at cost

Balances at beginning and end of year/period P=181,139,332

Building - at cost Cost

Balances at beginning and end of year/period 814,458 Accumulated Depreciation

Balances at beginning and end of year/period 814,458 Net book value – Total net book values P=181,139,332

The net book value of land includes deemed cost adjustment amounting to P=11.83 million as of March 31, 2021 and December 31, 2020. The deemed cost adjustment arose when the Company transitioned to PFRSs in 2005. Rent income from real estate properties for lease amounted to P=1.43 million and P=1.73 million in March 31, 2021 and March 31, 2020, respectively. Investment properties are rented out at different rates generally for a one-year term renewable every year. The Company has an existing non-cancellable operating lease contract with a domestic corporation as of December 31, 2019 which commenced in July 2018 with a lease term of five (5) years.

The future minimum lease payments for these lease agreements are as follows:

March 31, 2021 December 31, 2020 Not later than one year

P=1,863,686 P=1,959,259

Later than one year and not later than five years 2,082,309 2,584,071 Later than five years

– –

P=3,945,995 P=4,543,330

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Rental agreements

The Company entered into lease agreements for its office spaces and condominium units for lease with the following identified performance obligations: (a) lease of space; and (b) provisioning of water and electricity. Revenue from lease of space is recognized on a straight-line basis over the lease term while revenue for the remaining performance obligations are recognized when services are rendered. The tenant is required to issue post-dated check on the monthly rental payments. In case of delay in payments, a penalty of about 4% per annum is charged for the amount due for the duration of delay. The lease arrangement for the Company’s long-term lease transactions would typically require a tenant to pay advance rental equivalent to three (3) months and a security deposit equivalent to three (3) months rental to cover any breakages after the rental period, with the excess returned to the tenant.

10. Other Assets

Other current assets consist of prepaid expenses, input VAT and advances to contractors amounting to P=0.05 million and P=4.30 million as of March 31, 2021 and December 31, 2020, respectively.

Other noncurrent assets consist of:

March 31, 2021 December 31, 2020 Unused input VAT P=26,785,714 P=26,785,714 Utility deposits 835,155 778,556 Rental deposits and others 925,442 925,442 P=28,546,311 P=28,489,712

The unused input VAT arose from the purchase of parcels of land in previous years which were presented as part of “Real estate properties held for future development” account (see Note 8). Utility deposits pertain to water and electricity deposits by the Company. Rental deposits and others pertain to deposits from lease contracts and advances made by the Company for the contractors’ supply requirements.

11. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of:

March 31, 2021 December 31, 2020 Trade payables P=21,683,625 P=22,657,220 Accrued expenses: Development costs 140,106,428 94,795,218 Directors’ fee (Note 13) 3,957,990 2,696,293 Sick leave 10,134,553 10,134,553 Dividends payable 3,116,716 3,116,716 Customers’ deposits 4,239,387 4,793,568 Withholding taxes payable 3,832,132 2,244,195 VAT Payable 2,019,351 Due to related parties (Note 13) 1,393,187 1,444,845 Others 752,237 1,114,812 191,235,606 142,997,420 Less noncurrent portion 23,875,219 12,826,411 Current portion P=167,360,387 P=130,171,009

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Trade payables consist of payables to suppliers, contractors and other counterparties. Accrued expenses represent various accruals of the Company for its expenses and real estate projects. Accrued development costs represent the corresponding accrued expenses for the completed condominium units of the Company. Customers’ deposits consist of customers’ reservation fees, rental deposits and collected deposits for water and electric meters of the sold units. Other payables pertain to deferred rent income and employees’ payable.

12. Notes and Contract Payable

In 2020, the Company no longer applied for a new Certificate of Permit to Offer Securities for Sale. All outstanding commercial papers in 2019 have been paid to the investors on or before November 6, 2019. No interest expense was incurred for 2021 and 2020. Further, the contract payable amounting to P=7.50 million as of December 31, 2018 was settled through adjustment of the cost of the property (see Note 8).

The Company, CI, CDC and Cityplans, Incorporated (the Group) have credit lines with financial institutions aggregating to about P=2.30 billion as of March 31, 2021 and December 31, 2020, which are available for drawing by any of the companies within the Group. No loans were availed by the Group from the credit line as of March 31, 2021 and December 31, 2020. The Company has no specific credit lines with financial institutions as of March 31, 2021 and December 31, 2020. The carrying values of CDC’s investment properties and real estate properties for sale amounting to P=146.67 million and P=50.48 million, respectively, can be used as collaterals for the Group’s credit lines.

13. Related Party Transactions

Enterprises and individuals that directly, or indirectly through one or more intermediaries, control or are controlled by or under common control with the Company, including holding companies, subsidiaries and fellow subsidiaries, are related parties of the Company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these individuals, and companies associated with these individuals also constitute related parties. In considering each possible related entity relationship, attention is directed to the substance of the relationship and not merely the legal form. The Company, in the normal course of business, has transactions and account balances with related parties consisting mainly of the following: a. In 2016, the Company sold condominium units of an on-going real estate project to CPI with

a contract price amounting to P=19.42 million (realized as revenue based on percentage of completion). Retention for this sale transaction amounted to P=0.15 million as of March 31, 2021 and December 31, 2020 (see Note 6).

b. The Company has various shared expenses with its affiliates pertaining to general and

administrative expenses such as salaries, transportation, association dues, professional fees and rent. Outstanding balances are recorded as due from/to related parties under “Other

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receivables” and “Accounts payable and accrued expenses” account in the statement of financial position.

c. The Company has no standard arrangements with regard to remuneration of its directors.

Moreover, the Company has no standard arrangement with regard to the remuneration of its existing officers aside from the compensation received or any other arrangements in the employment contracts and compensatory plan. The Company does not have any arrangements for stock warrants or options offered to its employees.

Refer to succeeding pages for the transactions and account balances with related parties.

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Outstanding Balances Amount of transactions Receivable (Note 6) Payable (Note 11)

Nature of Transaction March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Term and Conditions Ultimate parent (CI)

Sharing of expenses charged by (to) the Company (Note 13b) (P=213,054) (P=843,516) P=– P=– P=1,231,791 P=1,444,845

30-day, unsecured, non-interest

bearing; to be settled in cash

Parent Company (CDC)

Sharing of expenses charged by (to) the Company (Note 13b) 303,930 285,978 465,326 – 161,396 –


bearing; to be received or settled

in cash Affiliate (CPI)

Sharing of expenses charged by (to) the Company (Note 13b) – – – – – –


bearing; to be received or settled

in cash Sale of real estate property

under pre-completion contracts (Note 13a) – – 150,000 150,000 – – Settled in cash

Directors Directors’ Fee – – – – 3,957,990 2,696,293 Settled in cash Total P=615,326 P=150,000 P=5,351,177 P=4,141,138

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14. Equity

The following table summarizes the authorized and outstanding shares of capital stock as of March 31, 2021 and December 31, 2020:

Authorized common stock - P=1 par value Balance at beginning and end of period/year 1,435,000,000 Issued and outstanding

Beginning of period/ year 1,431,785,284 Stock dividends −

End of period/year 1,431,785,284

On April 26, 2021, the Board of Directors approved the Board Resolution regarding the following:

a. Declaration of Five Percent (5%) stock dividend; b. Increase in authorized capital stock from 1,435,000,000 shares to 1,715,000,000 shares

with par value of Php1.00 per share; and c. To cause the amendment of the Articles of Incorporation to increase the authorized capital

stock to 1,715,000,000 shares with par value of Php1.00 per share. The said items will be submitted to the stockholders for approval and ratification during the Annual Stockholders’ Meeting to be held on June 8, 2021.

Dividends declared and issued/paid by the Company in 2020 and 2019 are as follows:

Dividends Board

Approval Date

Stockholders’

Approval Date Per Share Stockholders of

Record Date Date Issued/Paid Cash August 20, 2020 − P=0.0292 September 18, 2020 October 14, 2020 June 7, 2019 − 0.0417 June 24, 2019 July 5, 2019 Stock April 29, 2019 June 11, 2019 5.00% July 11, 2019 August 6, 2019

As of March 31, 2021 and December 31, 2020, the unappropriated retained earnings include the impact of the remaining balance of deemed cost adjustment of investment properties amounting to P=11.83 million, net of related deferred tax of P=5.07 million, which arose when the Company transitioned to PFRS in 2005. This amount has yet to be realized through sales. The balance of unappropriated retained earnings is restricted for the payment of dividends to the extent of the balance of the deemed cost adjustment.

In accordance with the rule on Minimum Public Ownership issued by the Philippine Stock Exchange (PSE) requiring listed companies to maintain a 10% public float at all times, the total number of shares owned by the public as of March 31, 2021 and December 31, 2020 are 227,316,830 shares which are approximately 15.88% of the total number issued and outstanding shares of the Company. On December 13, 1999, the PSE approved the listing of the Company’s common shares totaling 175,000,000 shares. The shares were initially issued at an offer price of P=1.00 per share. After listing in 1999, there had been subsequent issuances covering a total of 1,431,785,284 shares.

53

Below is the summary of the Company’s track record of registration of securities with the SEC and PSE as at March 31, 2021:

Number of

Shares Registered Number of holders of

securities as of yearend December 31, 2019 1,431,785,284 762 Add/(Deduct) Movement − (6) December 31, 2020 1,431,785,284 756 Add/(Deduct) Movement − (5) March 31, 2021 1,431,785,284 751

15. Financial Income

March 31, 2021 March 31, 2020 Interest income from:

Installment contracts receivable and contract assets

P=17,366,572 P=18,832,026

Cash and cash equivalents and short-term investments

928,639

2,337,994

P=18,295,211 P=21,170,020

16. Other Income - net Other income amounting to P=1.40 million and P=0.62 million as of March 31, 2021 and 2020, respectively, pertains to penalties for customers’ late payments, sale of scraps, gain on sale of shares of stock and forfeiture of reservations/downpayments received on sales which were not consummated.

17. Operating Expenses

March 31, 2021 March 31, 2020 Personnel (Note 18) P=11,278,776 P=10,259,028 Taxes and licenses 11,130,243 12,462,729 Professional fees 2,098,292 1,755,386 Insurance expense (Note 5) 417,347 173,485 Repairs and maintenance 335,675 796,964 Rent expense 273,608 246,430 Power, light and water 264,086 122,251 Outside services 196,350 224,809 Brokers’ commission 195,575 652,695 Postage, telephone and telegraph 172,218 122,944 Advertising and promotion 114,312 202,599 Transportation 44,894 43,959 Office supplies 25,372 21,612 Membership, association dues and others 480,181 491,908 P=27,026,929 P=27,576,799

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18. Personnel Expenses

March 31, 2021 March 31, 2020 Salaries and wages P=5,887,190 P=5,604,681 Commissions 1,997,372 1,221,350 Other employee benefits 3,394,214 3,432,997 P=11,278,776 P=10,259,028

Other employee benefits include performance and incentive bonus.

19 Financial Expense

Financial expense amounting to P=43,750 and P=123,450 as of March 31, 2021 and 2020, respectively pertains to finance charges. No interest expense was incurred on notes payable in 2021 and 2020.

20. Retirement Plan

Under the existing regulatory framework, Republic Act No. 7641, The Philippine Retirement Pay Law, requires a provision for retirement pay to qualified private sector employees in the absence of any retirement plan in the entity, provided, however, that the employees retirement benefit under the collective bargaining and other agreements shall not be less than provided under the law. The law does not require minimum funding of the plan. Retirement benefits cost The Company, jointly with affiliated companies, has a funded, noncontributory defined benefit retirement plan, covering all of its permanent employees. This provides for payment of benefits to covered employees upon retirement subject to certain condition which is based on a certain percentage of the employee’s final monthly salary and the number of years of service. The fund is administered by a third-party trustee bank under the supervision of the Retirement Committee of the plan who is responsible for the investment strategy of the plan.

21. Income Taxes Provision for (benefit from) income tax consists of:

March 31, 2021 March 31, 2020 Current P=4,534,242 P=9,305,723 Final tax on interest income 185,728 467,599 Deferred (84,171) (3,819,811) P=4,635,799 P=5,953,511

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Deferred income tax assets - net consists of the following:

March 31, 2021 December 31, 2020 Deferred income tax assets:

Difference between tax basis and book basis of accounting real estate transactions P=539,406 P=1,369,997

Accrued expenses 3,523,136 3,849,254 Unamortized past service cost 843,117 1,011,741

Unearned revenue 65,381 77,205 4,971,040 6,308,197 Deferred income tax liabilities:

Deemed cost adjustment in real estate properties (4,223,349) (5,068,019)

Accumulated excess contributions over retirement benefits cost (1,276,010) (1,531,211)

Cost to obtain contract (1,332,397) (1,959,233) Capitalized borrowing costs (2,531,250) (3,131,251)

(9,363,006) (11,689,714) 4,391,966 5,381,517

Deferred income tax asset recognized in other comprehensive income - actuarial loss

on defined benefit plan 2,263,453 2,716,144 Deferred income tax liabilities - net (P=2,128,513) (P=2,665,373)

On February 3, 2021, the House of Representatives and the Senate have ratified the Bicameral Committee’s version of the proposed “Corporate Recovery and Tax Incentives for Enterprises Act” or “CREATE”, reconciling the disagreeing provisions of Senate Bill No. 1357 and House Bill No. 4157.

The said Act aims to: 1. Improve the equity and efficiency of the corporate tax system by lowering the rate,

widening the tax base, and reducing tax distortions and leakages; 2. Develop, subject to the provisions of this Act, a more responsive and globally-

competitive tax incentives regime that is performance-based, targeted, time-bound, and transparent;

3. Provide support to businesses in their recovery from unforeseen events such as an outbreak of communicable diseases or a global pandemic and strengthen the nation’s capability for similar circumstances in the future; and

4. Create a more equitable tax incentive system that will allow for inclusive growth and generation of jobs and opportunities in all the regions of the country and ensure access and ease in the grant of these incentives especially for applicants in least developed areas.

The enrolled bill was submitted to the President on February 24, 2021 for his approval and upon receipt of the bill, the President may do any of the following: 1. Sign the enrolled bill without vetoing any line or item therein; 2. Sign the enrolled bill with line or item veto which veto may be overridden by Congress;

or 3. Inaction within 30 days from receipt which would result to the automatic approval of the

enrolled bill as it is.

Once signed, the measure is set to take effect 15 days after its complete publication in the Official Gazette or in a newspaper of general circulation.

56

Among the salient provisions of the aforementioned Bicameral version is the reduction in the corporate income tax rate as follows: Domestic Corporation For total assets of a Company of P=100 million and below: • 20% - if their net taxable income is P=5 million and below • 25% - if their net taxable income is more than P=5 million For a company with total assets of more than P=100 million, corporate income tax rate is 25% based on net taxable income. Total assets are exclusive of the value of the land on which the particular company’s office, plant, and equipment are situated.

The target effectivity date is on July 1, 2020. For the allowable deduction for interest expense reduced by a percentage (currently at 33%) of interest income subjected to final tax, the following rates shall apply:

• 20% interest reduction if the applicable corporate tax rate is 25% • 0% interest reduction if the applicable corporate tax rate is 20% Also, a reduction of minimum corporate income tax from 2% to 1% for a period of three years (i.e., July 1, 2020 until June 30, 2023).

The CREATE Act was passed into law on March 26, 2021. Since CREATE Act was passed into law after the approval date of the 2020 financial statements, the provision for current income tax reflected in the 2020 financial statements pertains to the computed tax using the 30% regular corporate income tax rate. On the other hand, the income tax expense reflected in the 2020 Income Tax Return was computed using the average of 30% and 25%, which is 27.5%. The provision for current income tax as of March 31, 2021 includes the difference between the income tax per 2020 audited financial statements and the 2020 Income Tax Return. The difference of 2020 provision for current income tax amounted to P=1.75 million. Deferred tax assets and liabilities as of March 31, 2021 was remeasured using the tax rate. The impact of remeasurement is recognized in profit or loss (i.e. provision for/benefit from deferred income tax), unless it can be recognized in other comprehensive income or another equity account. The impact of remeasurement as of March 31, 2021 in the profit or loss and other comprehensive income amounted to P=0.17 million and P=0.45 million, respectively.

22. Basic/Diluted Earnings Per Share

Basic/diluted earnings per share amounts were computed as follows: March 31, 2021 March 31, 2020 a. Net income P=27,139,638 P=24,038,597 b. Weighted average number of shares 1,431,785,284 1,431,785,284 c. Basic/diluted earnings per share (a/b) P=0.02 P=0.02

The Company has no potential dilutive common shares as of March 31, 2021 and 2020. Thus, the basic and diluted earnings per share are the same as of those dates.

57

23. Financial Instruments and Fair Value Measurement Financial Risk Management Objectives and Policies The Company’s principal financial instruments comprise cash and cash equivalents and short-term investments. The main purpose of these financial instruments is to finance the Company’s operations. The Company’s other financial instruments consist of financial assets at FVOCI, which are held for investing purposes. The Company has various other financial instruments such as installment contracts receivable, contract assets, other receivables and accounts payable and accrued expenses which arise directly from its operations.

It is, and has been throughout the year under review, the Company’s policy that no trading in

financial instruments shall be undertaken. The Company has no investment in foreign securities. The main risks arising from the Company’s financial instruments are cash flow interest rate risks, credit risk, equity price risk and liquidity risk. The Board of Directors is mainly responsible for the overall risk management approach and for the approval of risk strategies and principles of the Company and they are summarized as follows: Cash flow interest rate risk Cash flow interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s notes payable, with repriced interest rates. However, as of March 31, 2021 and December 31, 2020, the Company has no outstanding notes payable.

The Company’s policy in addressing volatility in interest rates includes maximizing the use of operating cash flows to be able to fulfill principal and interest obligations even in periods of rising interest rates.

Credit risk Credit risk arises when the Company will incur a loss because its customers, clients, or

counterparties fail to discharge their obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.

The Company trades only with recognized, creditworthy third parties. It is the Company’s policy

that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an on-going basis with the objective that the Company’s exposure to bad debts is not significant. The risk is further mitigated because the Company holds the title to the real estate properties with outstanding installment contracts receivable balance and the Company can repossess such real estate properties upon default of the customer in paying the outstanding balance. The Company’s policy is to enter into transactions with a diversity of credit-worthy parties to mitigate any significant concentration of credit risk. There are no significant concentrations of credit risk within the Company.

The tables below show the Company’s exposure to credit risk for the components of the statements of financial position. The exposure as of March 31, 2021 is shown at gross, before taking the effect of mitigation through the use of collateral agreements and other credit enhancements, and the maximum exposure at net, after taking the effect of mitigation through the use of collateral agreements and other credit enhancements.

58

Fair value of Financial

effect of Gross maximum collaterals/credit collaterals/credit exposure enhancements Net exposure Enhancements Financial assets at amortized cost: Cash and cash equivalents* P=236,616,833 P=− P=236,616,833 − Short-term investments − − − − Installment contracts receivable 1,282,382 78,808,768 − 1,282,382 Refundable deposits 1,049,721 − 1,049,721 − Other receivables: Due from related parties 465,326 − 465,326 − Advances to customers 2,053,558 − 2,053,558 −

Advances to condominium corporations 330,416 − 330,416 −

Retention 830,000 − 830,000 − Accrued interest 182,833 − 465,326 − Rent receivable 265,327 − 265,327 Others 78,834 − 78,834 − Contract asset 407,094,658 1,174,704,277 − 407,094,658 Total credit risk exposure P=650,249,888 P=1,253,513,045 P=242,155,341 P=408,377,040 * Excluding cash on hand amounting to P=16,000.

The following table summarizes the aging analysis of receivables and the credit quality of the

receivables as of March 31, 2021:

The table below shows the credit quality by class of asset for loan-related balance sheet lines as of March 31, 2021 based on the Company’s credit rating system. Neither past due nor impaired Medium High Grade* Grade** Total Financial assets at amortized cost: Cash and cash equivalents, excluding cash on hand P=236,616,833 P=– P=236,616,833 Short-term investments – − – Installment contracts receivable − 1,282,382 1,282,382

Contract asset − 407,094,658 407,094,658 Refundable deposits − 1,049,721 1,049,721

Other receivables: Due from related parties − 465,326 465,326 Advances to customers − 2,053,558 2,053,558 Advances from condominium

corporations −

330,416 330,416

Retention − 830,000 830,000 Accrued interest 182,833 − 182,833 Rent receivable − 265,327 265,327 Others − 78,834 78,834 P=236,799,666 P=413,450,222 P=650,249,888

* High Grade - financial assets with reputable counterparties and which management believes to be reasonably assured to be recoverable. ** Medium Grade - financial assets for which there is low risk on default of counterparties.

Neither past due nor impaired Days past due

Contract asset Current

> One Year Less than

30 days 30-60 days 61-90 days Over 90 days Total Installment contracts receivable P=– P=–

P=– P=847,019 P=66,022 P=384,233 (P=14,892) P=1,282,382

Contract asset 407,094,658 – – – – – – 407,094,658 Refundable deposits – 1,049,721 – – – – – 1,049,721 Other receivables:

Due from related parties – 465,326 – – – – – 465,326 Advances to customers – 1,271,959 – – – – 781,599 2,053,558 Advances to condominium

corporations

– – 330,416

– – – – 330,416 Retention – – 830,000 – – – – 830,000 Accrued interest – 182,833 – – – – – 182,833 Rent receivable − 265,327 − − − − − 265,327 Others – – 78,384 – – – – 78,384

P=407,094,658 P=3,235,166 P=1,238,800 P=847,019 P=66,022 P=384,233 P=766,707 P=413,632,605

59

The Company has performed an expected credit loss (ECL) calculation for its financial assets at amortized cost. The expected credit loss is a product of the probability of default, loss given default and exposure at default.

In determining the probability of default, the Company used historical default rates for the last five years for the installment sales from its buyers and last two years for other receivables. The Company applied the possible effects of macroeconomic factors to the historical loss rate. For loss given default, the Company determined the fair value less cost of repossession of collaterals upon default is higher than the exposure at default. Thus, no expected credit loss was recognized for the Company’s installment contract receivables, contract assets and other receivables from its buyer.

The Company considers its cash and cash equivalent and short-term investments as high grade since these are placed in financial institution of high credit standing. Accordingly, ECL relating to cash and cash equivalent and short-term investment rounds to nil.

The Company considers other receivables from third parties and related parties as medium grade. Third parties are primarily managed through screening based on credit history and financial information submitted. Whereas, related parties have low risk of default and have a strong capacity to meet their contractual cash flows in the near term.

Equity price risk

Equity price risk is the risk that the fair values of investments in equity securities will decrease as a result of changes in the market values of individual shares of stock. The Company is exposed to equity price risk because of investments held by the Company classified as financial assets at FVOCI in the statements of financial position. The Company employs the service of a third-party stockbroker to manage its investments in shares of stock.

A sensitivity analysis to a reasonable change in the equity price (with all other variables held constant) of 0.12 higher or lower, would increase or decrease the equity by P=71,267.39 Liquidity risk

Liquidity is defined as the risk that the Company could not be able to settle or meet its obligations on time or at a reasonable price.

The table below summarizes the maturity analysis of the Company’s financial liabilities as of March 31, 2021:

Up to One Year

Above One Year

Total

Accounts payable and accrued expenses * P=163,492,191 P=23,875,219 P=187,367,410 * Excluding statutory liabilities amounting to P=3,868,196.

Fair Values

The following tables provide fair value hierarchy of the Company’s financial assets, repossessed real estate properties for sale and investment properties, other than those with carrying amounts are reasonable approximations of fair values: Date of Fair value Valuation Level 1 Level 2 Level 3 Assets measured at fair value

Financial assets at FVOCI March 31, 2021 P=446,541 P=− P=− Asset for which fair values are disclosed

Investment properties December 31, 2020 − − 927,276,000

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The following method and assumptions were used to estimate the fair value of each class of financial instruments, repossessed inventories and investment properties for which it is practicable to estimate such value:

Cash and cash equivalents, short-term investments, installment contracts receivable, other receivables, accounts payable and accrued expenses Due to the short-term nature of the transactions, the fair values of cash and cash equivalents, short-term investments, other receivables, accounts payable and accrued expenses approximate their carrying amounts. The fair value of installment contracts receivable approximate its carrying amount as it carries interest rates that approximate the interest rate for comparable instruments in the market.

Financial Assets at FVOCI Financial assets at FVOCI are stated at fair value based on quoted market prices.

Repossessed real estate properties for sale The fair value of repossessed real estate properties for sale is based on the Company’s current selling price per area/slot of the property. Investment properties The fair value of investment properties is determined using sales comparison. Sales comparison approach considers the sales of similar or substitute properties and other related market data had the investment properties been transacted in the market. The significant unobservable inputs used in determining the fair value are the sales price per square meter of similar or substitute property, location, size, shape of lot and the highest and best use. Another method used in determining the fair value of land properties is based on the market data approach. The value of land is based on sales and listings of comparable property registered within the vicinity. This requires adjustments of comparable property by reducing reasonable comparative sales and listings to a common denominator by adjusting the difference between the subject property and those actual sales and listings regarded as comparables. The comparison is premised on the factors of location; size and shape of the lot; time element and others. The fair value of the investment properties as of March 31, 2021 and December 31, 2020 represents the highest and best use of the said properties which is the same with its current use.

24. Business Segments

The Company derives its revenues primarily from the sale and lease of real estate properties. The Company does not have any major customers and all sales and leases of real estate properties are made to external customers.

Segment Revenues and Expenses:

March 31, 2021 March 31, 2020 Sales of real estate properties* P=146,801,013 97.50% P=91,926,830 95.15% Rent income 1,434,046 0.95% 1,733,654 1.79% Others -net 2,328,725 1.55% 2,954,703 4.75% P=150,563,784 100.00% P=96,615,187 100.00%

*Includes interest income from installment contracts receivable and contract assets amounting to P=17.37 million and P=18.83 million as of March 31, 2021 and March 31, 2020, respectively. The Company’s real estate projects, investments, and properties under lease are primarily located in Metro Manila.

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26. Other Matters

COVID-19 Outbreak In a move to contain the COVID-19 outbreak, on March 13, 2020, the Office of the President of the Philippines issued a Memorandum directive to impose stringent social distancing measures in the National Capital Region (NCR) effective March 15, 2020. On March 16, 2020, Presidential Proclamation No. 929 was issued, declaring a State of Calamity throughout the Philippines for a period of six (6) months and imposed an enhanced community quarantine (ECQ) throughout the island of Luzon until April 12, 2020, which was subsequently extended to April 30, 2020 and further extended to May 15, 2020. After which, modified ECQ was implemented in Metro Manila until May 31, 2020. Starting June 1, 2020, NCR and other parts of the Philippines were declared to be under general community quarantine (GCQ), until June 15, 2020. The GCQ was further extended until June 30, 2020, then again until July 15, 2020. Afterwards, the GCQ was extended until July 30, 2020. On August 3, 2020, the President of the Philippines reverted Metro Manila, and the provinces of Laguna, Cavite, Rizal and Bulacan to modified enhanced community quarantine from general community quarantine from August 4, 2020 until August 18, 2020. Starting August 19, 2020, Metro Manila, as well as the provinces of Laguna, Cavite, Rizal, and Bulacan, returned to general community quarantine unless earlier lifted or extended. As of March 31, 2021, Metro Manila and some nearby provinces were placed under the enhanced community quarantine due to the surge in the number of COVID cases. The quarantine measures were implemented in order to manage the spread of the virus.

The COVID-19 pandemic has caused disruptions in the Company’s business activities. Further, the scale and duration of the impact of the pandemic remain uncertain as at the report date. It is not possible to estimate the overall impact of the outbreak’s near-term and longer effects. The outbreak could have a material impact on the Company’s financial results for the rest of 2021 and even periods thereafter. As this global problem evolves, the Company will continually adapt and adjust its business model according to the business environment in the areas where the Company operates, in full cooperation with the national and local government units.

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CITY & LAND DEVELOPERS, INCORPORATED SUPPLEMENTARY SCHEDULE OF FINANCIAL SOUNDNESS INDICATORS


December 31, 2020 (Audited)


Current 5.94 6.98 7.81 Asset-to-equity 1.13 1.12 1.11 Debt-to-equity – – – Asset-to-liability 8.40 9.08 9.49 Solvency* 0.36 0.38 0.37 Interest rate coverage – – – Acid-test ratio 1.07 1.40 2.09 Return on equity (%)* 4.81% 4.69% 4.40% Return on asset (%)* 4.24% 4.18% 3.93% Net profit margin 18.03% 29.50% 24.88%

Basic/Diluted earnings per share* P=0.08 P=0.07 P=0.07 * Annualized for the period of March 31, 2021 and March 31, 2020

Manner of calculation:

Current ratio

=

Total Current Assets / Total Current Liabilities


Total Assets

Total equity (net of net changes in fair value of financial assets at fair value through other comprehensive income and accumulated

re-measurement on defined benefit plan)


Notes and Contracts Payable

Total equity (net of net changes in fair value of financial assets at fair value through other comprehensive income and accumulated

re-measurement on defined benefit plan)


=

Total Assets / Total Liabilities

Solvency ratio = Net Income after Tax + Depreciation Expense

Total Liabilities

Interest rate coverage ratio =

Net Income Before Tax + Depreciation Expense + Interest Expense

Interest Expense

Acid-test ratio =

Cash and Cash Equivalents + Short-term Investments +

Installment Contracts Receivable, current + Contract Assets, current + Other Receivables, current

Total Current Liabilities


=


Stockholder's Equity

Return on assets ratio = Net Income

Total Assets

Net profit margin = Net Income after Tax

Total Revenue

Basic/Diluted earnings per share

=

Net income after Tax

Outstanding shares

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CITY & LAND DEVELOPERS, INCORPORATED MAP OF THE RELATIONSHIPS OF THE COMPANIES WITHIN THE GROUP

city & land developers, incorporated definitive

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